News Column

Fitch: U.S. Timeshare Delinquencies Fall to Lowest Level Since 2007

August 4, 2014



NEW YORK--(BUSINESS WIRE)-- U.S. timeshare ABS delinquencies fell again this past quarter to their lowest level in seven years, according to the latest index results from Fitch Ratings.

Total delinquencies for second quarter-2014 (2Q'14) were 2.92%, down from 3.19% in 1Q'14 and 3.05% in 2Q'13. This marks two years of consistent year-over-year improvement. Furthermore, this is the lowest level of delinquencies reported by the Fitch index since 2007.

Defaults are consistent with last quarter, but are also showing year-over-year improvement. Defaults for 2Q'14 were 0.66%, a slight increase from 1Q'14 at 0.65%, but down from the 0.72% observed a year ago for 2Q'13. However, default levels remain somewhat elevated compared to pre-recessionary levels.

On an annualized basis (rolling 12 months), defaults were 7.45% for 2Q'14, down from 7.73% for 1Q'14. This represents the eighth consecutive quarter of improvement as well as the lowest level of defaults for timeshare ABS in over four years.

Fitch's Rating Outlook for timeshare ABS remains Stable due in part to the delevering structures found in timeshare transactions and ample credit enhancement levels.

Fitch's timeshare ABS index is an aggregation of performance statistics on pools of securitized timeshare loans originated by various developers. Expected cumulative gross defaults on underlying transactions can range from 9% to above 20%. While delinquencies and defaults may vary on an absolute basis, most transactions supporting the index exhibit similar overall trends.

The Fitch timeshare performance index summarizes average monthly delinquency (over 30 days) and gross default trends tracked in Fitch's database of timeshare asset backed securities (ABS) dating back to January 1997 and is available on a quarterly basis.

Fitch's quarterly index can be found at 'www.fitchratings.com' under the following headers:

Sectors then Structured Finance then ABS then ABS Indices then Timeshare

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Brad Sohl, +1 212-908-0792

Senior Director

Fitch Ratings Inc., 33 Whitehall Street, New York, NY, 10004

or

Margaret Rowe, +1 312-368-3167

Director

or

John Bella, +1 212-908-0243

Managing Director

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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