Another timeshare loan-backed securitization is on the way, this one a $250 million offering from Hilton Resorts Corp., according to a presale report from Standard and Poor's.
The deal is led by Deutsche Bank and Bank of America Merrill Lynch. It's expected to close August 8.
S&P assigned preliminary 'A' ratings to the single tranche of Series 2013-A notes.
The notes are backed by a portfolio of 13,229 Hilton Resorts deeded timeshare interests with an aggregate balance of $255.12 million. The timeshare borrowers in the pool have a weighted average FICO score of 745.
The transaction benefits from initial overcollateralization of 2%; a reserve account with an initial funded balance of 1% of the initial collateral balance; and excess spread, which initially may be approximately 8.5% per year.
However, the portfolio is a high-balance pool. Approximately 19.5% of the pool comprises loans with a balance greater than $50,000 and approximately 10.1% greater than $75,000. These higher-balance loans have exhibited an increased propensity to default, according to S&P.
Grand Vacation Services will service the notes, with Wells Fargo acting as backup servicer.