Hilton Grand Vacations Trust is preparing to sell $400 million in securitized bonds, with a pool of timeshare loans serving as collateral.
Hilton Resorts Corp.-originated loans account for the largest share of the loans in the collateral pool, at 47.4%. The HRC loans tend to perform better than loans that Diamond Resorts and Bluegreen Vacations have originated, according to Fitch Ratings.
Diamond and Bluegreen loans account for 24.4% and 28.2%, respectively, in the deal, called HGVT 2025-2, Fitch said.
Although Hilton Resorts accounted for the larger portion of loans in the asset pool, S&P says the pool overall is weaker because of Bluegreen Vacation loans' inclusion in the deal. Also, larger loans that are greater than $100,000 at origination have had poorer performances historically, compared to the overall pool.
The percentage of larger loans in HGVT-2 is 20.08%, S&P said. While that is lower than the 23.2% seen in the previous deal, it is still too high, the rating agency said.
Total initial hard credit enhancements—and its components of subordination, initial aggregate overcollateralization, reserve account and pre-pricing excess spread—is higher compared to the previous deal, the HGVT 2025-1, according to S&P Global Ratings.
The hard credit enhancement is 56.0%, 26.5% and 11.0% on classes A, B and C, respectively, according to analysts at Fitch Ratings, which also rated the deal.
All three tranches of the class A, B, and C notes will mature in May 2044, Fitch said.
The collateral pool has a FICO score of 742 on a weighted average (WA) basis, down slightly from 745 on the 2025-1 deal and 749 on the 2024-3 transaction, the rating agency said, S&P. Called collateral from a previous deal, the Hilton Grand Vacations Trust, 2018-A, with its significant seasoning of 84 months, account for the uptick in original terms on a WA basis.
S&P assigned ratings of AAA and A- to classes A and B, respectively. Fitch assigns AAA, A- and BBB- to classes A, B and C, respectively.
