Travel + Leisure Co. (formerly Wyndham Destinations) is launching the first timeshare ABS transaction since October 2020, according to Fitch Ratings and S&P Global Ratings.
The $300 million Sierra Timeshare 2021-1 Receivables Funding transaction is backed by a pool of 13,506 prime, fixed-rate timeshare loans originated by Wyndham Vacation Resorts and Wyndham Resort Development Corp.
The $300 million Sierra Timeshare 2021-1 Receivables Funding LLC transaction features four classes of notes, including an AAA-rated $98.9 million tranche of Class A notes.
The transaction is structured similarly to the previous Sierra Timeshare issuance last July. Credit enhancement on the Class A notes has declined slightly to 70% for the 2021-1 notes compared to Sierra 2020-2.
The deal is also the first to come to market since BlueGreen Corp’s $131 million BXG Receivables Note Trust 2020-A last October.
S&P notes that the deal will permit Wyndham to grant deferments, modifications and waivers on loans; those loans will be considered current for purposes of measuring delinquency and default calculations.
“U.S. lodging is one of the hardest-hit sectors with unprecedented declines in revenue due to the containment measures to slow the spread of COVID-19. Within lodging, we believe the performance of timeshare loan securitizations will likely deteriorate,” according to the presale report from S&P.
