JPMorgan analysts said that the majority of consumer ABS asset classes have continuously exhibited solid collateral performance after the crisis, including timeshare ABS.
This week’s JPMorgan’s Securitization Products Weekly stated that the timeshare ABS’ 60+ delinquencies across all vintages have stabilized and presently range between 2% to 4%. In fact, the 60+ delinquencies for the post-2008 vintages are lower than those for previous vintages. For instance, Marriott Vacation Club Owner Trust (MVCOT) 2009 delinquencies are roughly at 3.5% and Silver Leaf Resorts’ (SRFC) 2010's 60+ delinquencies are at their lowest at 1%, analysts cited.
They added that the low delinquency rates are a positive sign for investors, particularly when there are also high levels of credit enhancement in the sector. For instance, the 2010 and 2011 vintages have 30% hard triple-A current credit enhancement. Meanwhile, the 2007 vintage with the least triple-A hard credit enhancement possesses 24% credit support.
Last week the latest timeshare deal from MVCOT 2012-A Class A priced at 190 basis points, which was 10 basis points tighter versus the SRFC 2012-1 that closed in March. The Series 2012-A from MVCOT was the first deal from the issuer since 2012 and its first as an independent company, JPMorgan analysts noted. The company was spun off from Marriot International in November 2011.
Timeshare ABS is still gives investors a decent spread pickup, according to analysts. For instance, the MVCOT single-A senior tranche that priced last week was 30 basis points wider than the single-A subordinate subprime auto ABS indicative spreads at 160 basis points.