A pool of 14,738 timeshare loans is providing collateral for $375 million in asset-backed securities coming to market from the Hilton Grand Vacations Trust (HGVT), 2024-2, in Hilton Resorts Corp.'s eleventh securitization through the HGVT trust.
HGVT 2024-2's notes benefit from increased hard credit enhancement, which amounts to 47.75% on the A notes; 26.50% on the B notes; 11.50% on the C notes and 6.00% on the class D notes, which are higher than the levels seen on the 2023-1 deal, according to Fitch Ratings. All the notes, issued through four tranches, have a legal final maturity date of March 2038, the rating agency said.
While the total credit enhancement package is higher to overcollateralization, which represents 1.00% of the pool balance, was lower than the 3.00% seen on the HGVT 2023-1 deal, Fitch said. There is also a reserve account, whose enhancement was sized at 5.00% and excess spread of 7.82%, the company said.
Fitch assigns AAA ratings to the A notes; A to the B notes; BBB to the class C notes and did not rate the D tranche.
The company also noted that HGVT 2024-2 has collateral characteristics that compare with the 2023-1 deal, Fitch said. The current portfolio has a higher loan count (14,738), higher than the 10,020 in the HGVT 2023-1 portfolio. On a weighted average (WA) basis, the underlying loans have an original term of 119 months, with 102 months remaining on the 2024-2 pool, slightly lower than the 105 months seen on the 2023-1. Also on a WA basis, the loans pay a coupon of 15.04%, slightly lower than the 15.39%, Fitch said.
The concentration of foreign obligors in series 2024-2 reached 9.61%, the highest that the pool has seen since the 14.5% level on the HGVT 2019-A, Fitch said.
A deal pre-sale report compared the current deal to the HGVT 2024-1B transaction, finding that, than the HGVT 2024-1B, which had 10,672 loans in the pool. The HGVT 2024-2 collateral has an average loan balance of $25,701, up from the $23,563 seen on the 2024-1B deal, Fitch said.
