A $120.2 million securitization of timeshare loans linked to the Hilton name is expected to close on Oct. 30, according to a pre-sale report from Standard & Poor's.
Deutsche Bank Securities is underwriting the deal, called Elara HGV Timeshare Issuer 2014-A.
An A tranche for $107.5 million is rated A (sf)’ and a B piece for $12.7 million is rated BBB (sf).’
The ratings are supported by credit enhancement in several forms: overcollateralization, a reserve account, available excess spread, and subordination of class B notes to the A tranche.
A timeshare loan is “typically an installment sale or mortgage loan with an original term generally in the seven- to 10-year range that is secured by a right to use the property or by a deeded interest, as applicable,” said S&P.
The owners of the timeshares underlying Elara HGV are members of one of two clubs: Hilton Grand Vacations Club or the Hilton Club, both of which operate under the umbrella of the high-profile resort company. The clubs jointly have 200,000 members.
There are 6,546 loans in the pool backing the deal, with an average balance of $17,393 and a weighted average coupon of 13.39%. The FICO scores of the underlying borrowers span a broad range, from 600 to 853, with a weighted average FICO score of 743.
The transaction's originator is LV Tower 52, the sales agent is Hilton Resort Corp., and the servicer is Grade Vacation Services.
