Bluegreen Corp. is returning to the securitization market after a one-year hiatus. The originator plans to offer $118 million of securities that are backed by timeshare loans.
The deal, BXG Receivable Note Trust 2015-A, is structured with $89 million of class A notes rated A’ and $28.4 million of class B notes rated BBB’ by DBRS. The notes are due May 2030 and the transaction is expected to close Jan. 29 of this year.
Bluegreen has steadily tapped the securitization market for funding, issuing more then $1.3 billion of term timeshare ABS since 2002 via 10 deals.
Its latest deal sticks to the formula of past securitizations. The pool is backed by a portfolio of loans that have a average payment history of 18 months that were originations between the fourth quarter of 2005 and the fourth uater of 2014. The average remaining life of the collateral pool is approximately 99 months. Borrowers in the pool have a strong credit profile with a weighted-average FICO score of 708.
Bluegreen was publically traded from 1985 through April 2013, when it was acquired by Woodbridge Holdings, itself owned by BFC Financial Corp. (54%) and BBX Capital Corporation (46%).
The outlook for timeshare securitizations is bright. This year's issuance is expected to top the $2.4 billion printed in 2014, which itself was a 20% increase over 2013 volume.
“Loan performance continues to improve. Investor demand will be strong,” said Jeffrey Traola , a director at Credit Suisse Securities who spoke on roundtable on timeshare securitizationhosted by Standard & Poor’slast month. “Timeshare is one of the most-liquid esoteric assets, but the premium still exists relative to the more commoditized assets, and as such, demand is expected to be there.”
Traola said that over the long-term, growth in the market may be supported by an increasing number of timeshare developers eyeing markets outside of the U.S.
Andrew Yuder, managing director at BB&T Capital Markets, who also spoke on the S&P roundtable, predicts a 10% increase this year over 2014 volumes, largely driven by the growing demand for the asset class on the part of investors that have bought other traditional and off-the-run assets and are attracted to the yields of timeshare deals.
Additionally Yuder said that existing timeshare investors are looking to invest larger positions. “There are more investors today looking into this than ever before, which is a great trend for timeshare securitization,” he said.