Welk Resort Group closed a $158.67 million securitization backed by notes receivable from vacation ownership interests on Tuesday, according to a company press release.
Standard & Poor'sprovided the credit rating on the transaction. The deal, Welk Resorts 2013-A LLC, is the issuer's first transaction in 2013.
The A’ rated notes and the BBB+’ rated notes were offered with coupons of 3.10% and 3.96%, respectively. All-in pricing reflects a long-term coupon of 3.18%, with an advance rate of 96.75%. According to the press release, the lender base on this transaction consists of 11 corporate investors.
The securitization book-runner, structuring agent and co-lead manager was BB&T Capital Markets. Bank of America Merrill Lynch served as co-lead manager.
Welk Resorts has over $200 million in notes receivable through some 16,000 loans it has made to timeshare and club interval points-based owners. Loans are generally made for 10 to 15 years.
"This transaction provides additional depth to our lending ability, as it provides the capacity to enter the investor markets for an additional source of financing for our notes receivable," said Carisa Azzi, vice president & chief financial officer of Welk Resorts.
On Nov. 20, Diamond Resorts International, closed its $225 million timeshare ABS deal, Diamond Resorts Owner Trust 2013-2. The deal’s AA’ rated notes were offered with a coupon of 2.27% and the $11.85 million of A+ rated notes were offered with a coupon of 2.62%, for an overall weighted average interest rate of 2.29%. The advance rate for this transaction was 95%.
Wyndham Worldwide Corporation which issued A’ rated notes and BBB’ rated notes from its Sierra Timeshare 2013-3 transaction on Nov. 7, offered the notes with coupons of 2.20% and 2.70%, respectively, for an overall weighted average coupon of 2.32%. The advance rate for this transaction was 88%.
Welk has been a less frequent issuer in the space. Diamond Resorts marked its return to the securitization market only in Jan. following a two year lull in issuance. Diamond Resorts Owner Trust 2013-2 AA’ rating is the highest rating assigned to this asset class since 2009. Wyndham, on the other hand, has been a regular issuer in the market its latest Sierra deal was the third issue of 2013.
Timeshare ABS volumes are expected to reach the $2.3 billion in 2013 and according to Moody’s Investors Service outlook on the timeshare ABS, securitization of the asset class should increase in 2014. The market is expected to close around the $2.3 billion in mark in 2013, around the same level as the $2 billion issued in 2012.