Marriott Vacations Worldwide plans to issue a $250 million timeshare loan ABS, according to a Fitch Ratings presale report.
The deal, MVW Owner Trust 2013-1 is backed by pool of fixed-rate timeshare loans originated by Marriott Ownership Resorts. The structure will offer $223.7 million of ‘A’-rated, class A notes; and $26.3 million, ‘BBB’-rated, class B notes. Bank of America Merrill Lynch is lead manager on the deal.
This is the issuer’s 15th term securitization deal. The weighted average seasoning has improved compared to prior transactions. At 37 months it is the highest of any of Marriott’s term loan ABS transactions, said Fitch.
“A pool with higher seasoning may experience lower cumulative gross defaults relative to less seasoned pools,” explained analysts in the presale report.
However the credit quality of the 2013-1 deal has weakened compared to the issuer’s last deal, the 2012-1 transaction. Fitch said that the deal includes loans with Fico scores below 600, a change from the 2012-1 pool.
Other variances to structuring in this latest deal include a prefunding account not present in the 2012-1 deal. The account will hold up to 10% of the initial note balance and will be used to purchase eligible timeshare loans. The deal allows for qualified substitutions of upgraded loans.
According to Standard & Poor’s, timeshare ABS issuance remains behind last year’s full-year total of $2.3 billion from 10 transactions. The latest Marriott deal brings year-to-date issuance to $1.1 billion.
