A pool of fixed-rate vacation ownership loans will secure $229.3 million in asset-backed securities (ABS) from the HINNT Timeshare 2025-B from sponsor Holiday Inn Club Vacations.
HICV is among several originators contributing loans to the pool, including Wilson Resort Finance and Royal Resorts. The companies develop market, sell and operate vacation ownership resorts, according to ratings analysts from Moody's Ratings.
The resale market for timeshare assets is not historically robust, according to Moody's. In this deal, however, the loan sellers can repurchase defaulted loans, which increases the transaction's recovery rate. That enhances the credit to the notes, Moody's said.
The sponsor can repurchase and substitute up to 35% of the initial pool balance, which is high compared to other consumer ABS transactions, Moody's said. It also increases the risk that a court could recharacterize HICV's sale of loans to the depositor as a financing.
The deal will repay principal on a pro rata basis, but payments to the subordinate notes are subject to performance tests, according to Moody's.
Initial purchasers include
HICV is the transaction's servicer, while Computershare Trust will act as the backup servicer. With the sponsor's strong market position, Moody's assumes a 10% recovery rate.
HINNT will issue the debt through five tranches of notes, which will mature on May 15, 2045, according to Moody's. The class A, B, C, D and E notes benefit from total initial hard credit enhancement levels of 71.10%, 35.70%, 18.70%, 9.65% and 4.40%, respectively. Classes A and B will issue the bulk of the notes, $153,21 million representing 66.80% of the pool, Moody's said.
All the notes in the capital structure benefit from an initial reserve of 2.50%, and initial overcollateralization of 1.90%, according to the capital structure.
The underlying asset pool consists of loans from prime borrowers, with the weighted average (WA) FICO score of 740. That's six points lower than what was seen on the 2025-A pool, Moody's said. Also, default rates in newer origination vintages of HICV's managed portfolio have been higher than that of older vintages.
The pool has 9,030 obligors with an original term of 119 months.
Moody's ratings on the notes range from Aaa on the class A notes to B3 on the class E notes.
