First time issuer Gold Key Resorts plans to issue $144 million of bonds backed by timeshare loan receivables.
BB&T is the structuring agent on the deal, Gold Key Resorts 2014-A.
Standard & Poor’s expects to assign A’ ratings to $108 million of class A bonds, BBB-’ ratings to $28.7 million of class B bonds and BB’ ratings to $8 million of class C bonds. The class A notes have credit enchancement at 28.3%.
Gold Key's network of resorts is relatively small compared to some other developers that have issued timeshare securitizations. The properties consists of 5 resorts in the Virginia Beach, VA area — the Ocean Beach Club — and one resort currently under redevelopment in the Outer Banks of North Carolina.
The underlying portfolio of loans backing Gold Key's securitization is comprised of more than 10,000 loans — 100% of the loans in the collateral portfolio relate to resorts in the Virginia Beach, Va. resort area. The loans have a weighted average seasoning of 25 months — a much longer payment history than other timeshare securitizations rated by S&P this year. For example the Sierra 2014-3 transaction (completed this month) has loans with a weighted average payment history of 10 months and Silverleaf (completed in October) featured loans with a weighted average payment history of five months.
However the GoldKey portfolio has lower credit scoring with a weighted average FICO score of 686 compared to 716 and 700 on the aforementioned timeshare deals.
