Lantern Asset Management has completed a $120.2 million securitization of timeshare loans linked to the Hilton name.
The deal, Elara HGV Timeshare Issuer 2014-A, is backed by 6,546 loans to members of either the 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. It consists of two tranches, one for $107.5 million with an A’ rating from Standard & Poor’s pays interest of 2.53% and one for $12.7 million with a BBB’ rating pays 3.02%, according to a press release published Tuesday.
Deutsche Bank Securities is the underwriter.
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.
The loans in the pool have 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.