Marriott has improved the credit quality of the loans backing its latest timeshare securitization, MVW Owner Trust 2015-1.

The weighted average FICO of the loans in the pool is 726, up from 717 for MVWOT 2014-1, which was completed in September of last year. The loans in the 2015-1 pool are also more seasoned; borrowers have made, on average, 43 monthly payments which is higher than any prior MVWOT transaction.  Marriott’s previous securitization, MVWOT 204-1, for example, pools loans with 24 months' seasoning.

Pools with higher seasoning may experience lower cumulative gross defaults relative to unseasoned pools, as seasoned pools have incurred a significant portion of their defaults prior to their inclusion in a securitization.As a result, the 2015-1 transaction was able to earn the same rating as the 2014-1 notes, despite benefitting from lower levels of subordination. Fitch Ratings assigned preliminary ‘A’ rating to $233 million of class A notes with credit enhancement of 12.25%; and a ‘BBB’ rating to $21.8 million of class B notes with credit support at 4%.  The 2014-1 class A notes were structured with credit enhancement of 14% and the class B note had credit enhancement of 4.5%.  

The notes issued by the latest deal are backed by a pool of fixed-rate timeshare loans originated by Marriott Ownership Resorts, Inc. (MORI) or its affiliates. MORI is a subsidiary of Marriott Vacations Worldwide Corporation (MVW). This is MVW’s 17th term securitization.

As with the prior transactions, the series 2015-1 features a prefunding account that will hold up to 20% (up from 18% in 2014-1) of the initial note balance after the closing date to purchase eligible timeshare loans. The transaction also allows for qualified substitutions of upgraded loans of up to 15% of the pool balance.

Bank of America Merrill Lynch is the lead manager.


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