Marriott Ownership Resorts is sponsoring its seventh securitization of cashflows from timeshare loan payments from both the Marriott Vacations Worldwide and Vista Signature Experiences platforms, hoping to raise $280 million in capital from investors.
The collateral pool is stronger from a credit perspective than the 2022-1 pool in several ways. On a weighted average (WA) basis, the borrowers on the underlying loans have a FICO score of 733, up from 726 in 2022-1, according to Fitch Ratings. That score is also in line with a stronger borrower base, since it was in line with WA FICO scores on the 2022-1 deal.
Also, some 59.5% of the pool comes from Marriott Vacation Club, up substantially from the 45.0% ratio in 2022-1. Marriott Vacation Club loans have stronger performance track records than other brands, except for Westin. Fifteen-year loans account for 41.1%, a slight decrease from 44.2% in 2022-1.
Other aspects of the collateral pool did raise some credit concerns, however, according to Fitch. For one, collateral from the WHV Resort Group accounts for some 16.9% of collateral concentration, up from 8.1% in 2022-1.
BofA Securities, Credit Suisse Securities and Wells Fargo Securities are the initial note purchasers on the deal, which will issue the notes through a pro-rata capital structure. Payments to the subordinate notes, however, are subject to performance tests. The notes will benefit from 37.0% in total initial hard credit enhancement, according to Fitch.
A reserve account, funded at 0.50% of the initial pool balance at closing, also provides credit enhancement to the notes. Aside from the hard credit enhancement and the reserve account, the notes also benefit from initial over-collateralization of 2.0%, and excess spread.
Fitch intends to assign 'Aaa' ratings to the $181.4 million, class A notes; 'A2' to the $45 million, class B notes; 'Baa2' to the class C notes and 'Ba2' to the class D notes. The notes have a legal final maturity of Oct. 21, 2041.
