Bluegreen is preparing a $171.95 million securitization of a pool of timeshare loans, most of which are of prime quality, according to a presale report by DBRS Morningstar.
BXG 2022-A is the 16th term asset-backed security translation for Bluegreen in the past 20 years, the ratings agency's report said. Since 2008, the company completed nine transitions with subordinates and senior rated securities. BXG 2022-A has both subordinate and senior-rated securities, the report said.
BXG 2022-A will issue the notes through three classes: a $70.98- million tranche rated ‘AAA,’ a $56.474 million tranche rated ‘A’ and a $44.497 million tranche rated ‘BBB low’ by DBRS Morningstar in the report issued, on April 18. DBRS Morningstar’s Paul Fazi, Jeremy Keegan and Brian Medwig wrote the report.
The aggregate loan balance for BXG Receivables Note Trust 2022-A is $185,008,141, the highest of the previous six in the series. In addition, the average loan balance is $13,419. The weighted average coupon rate is 15.48%. The weighted average age is 11 months and none are more than 31 days past due. The weighted average FICO score is 724. Florida (12.9%), North Carolina (6.8%), California (6.3%), Georgia (5.9%) and Texas (5.4%) are the top obligor state concentrations.
The expected closing date is April 29 and the first payment date is May 31. The notes are expected to mature on Sept. 28, 2037.
The originators are Bluegreen Vacations Corp. and Bluegreen Properties N.V. The backup servicer is Concord Servicing, LLC and the owner trustee is the highly rated Wilmington Trust Co. The indenture trustee and custodian is U.S. Bank N.A. Bank of America N.A. is the lockbox bank.
For close to 30 years, Bluegreen has originated and serviced timeshare loans and has 217,000 owners in its Bluegreen Vacation Club as of last year. Its main business is marketing and selling timeshare properties and operating vacation ownership resorts. In addition, it provides financing to creditworthy customers who buy timeshares at its own resorts and affiliates. Alan Levan, who served as the chairman of four New York Stock Exchange-listed companies, is the chairman and CEO of the Boca Raton, Florida-based Bluegreen.
While the timeshare market took a hit during the coronavirus pandemic — Bluegreen had layoffs — DBRS Morningstar appears optimistic.
“DBRS Morningstar’s projected losses do not include any additional stress from the coronavirus impact; the cumulative gross loss (CGL) assumption is 23.50%,” the agency said in a news release.
