The latest deal issued by Welk Resort Group, called Welk Resorts 2013-A LLC, is the 11thtimeshare deal to be issued so far this year compared to 10 deals issued last year but the volume levels are the same, according to Standard & Poor’s. It boosts volumes for the asset class to $2.3 billion, according to Standard & Poor’s.
S&P assigned the deal’s class A tranche with 12% overcollateralization a A’ rating, and a BBB+’ rating to the class B notes structured with 3.25% overcollateralization.
Welk Resort Group Inc. was formed in 1964 by Lawrence Welk, host of the Lawrence Welk Show from 1955 to 1982.The group established its first timeshare development in 1984. Welk operates resorts in San Diego, Calif., Palm Springs, Calif., Branson, Mo., Cabo San Lucas, Mexico, and Lake Tahoe, Calif., and began selling a points-based program in 2006 called the Welk Resorts Platinum Ownership Program.
The loans in Welk's securitized portfolio include both vintage deeded vacation ownership interest loans (1.6% of pool) as well as points-based vacation ownership interest loans (98.4%) in the Welk Resorts Platinum Ownership Program.
A vacation ownership interest loan is typically an installment sale or mortgage loan with an original term generally in the seven- to 10-year range that is secured by a right to use the property or by a deeded interest, as applicable. Timeshares were typically sold on a fixed-week, fixed-unit basis that gaves the timeshare owner the right to use the property for a defined time period each year in perpetuity.
However points programs introduced in 1990 allowed purchasers to “buy points” an apply these towards the use of the timeshare property within a developer's system, subject to availability, at any time during the year.
Welk has 43,000 owners, more than 1,000 employees, and a receivables portfolio of more than $200 million, according to the S&P presale.
The issuer has expansion planned at the Lake Tahoe, Calif. location as well as future expansion plans to Breckenridge, Colo. expected to open in 2015 and in Poipu Kauai, Hawaii, which may open in 2017.