Zuana Beach Resort in Santa Marta, Colombia is structuring Latin America's first securitization of timeshare sales. The five-star resort will transfer 70% of its time-sharing weeks to an SPV and will issue P50 billion ($25 million) through the Bolivar Group.
The offering has a financial guarantee from German insurer Munchen Ruck and was rated triple-A on the local scale by Duff & Phelps Credit Rating Co.
"This is the first transaction of its kind in the region," said Maria del Pilar Galvis, a consultant who helped structure the deal. "For the issuer it is a very effective way to obtain liquidity and investors like the fact that the bonds are backed by existing real estate."
The deal is being marketed to local investors. Galvis explained that international offerings of this kind are unlikely. "The are no other hotels such as the Zuana Beach so there wouldn't be enough volume to go international," she said. "In addition, since Colombia lost its investment grade rating it's been very difficult to approach the foreign markets, while we do have demand for this type of paper locally."