Westgate Resorts plans to issue $140 million of notes backed by timeshare mortgage financings via its Westgate Funding 2013-1 securitization deal, according to a DBRS presale report.

DBRS assigned preliminary ratings of ‘A’ to the $96 million class A notes and ‘BBB’ to the $44.2 million class B notes issued under the deal’s capital structure

The assets of the issuer will consist primarily of a pool of mortgage loans used to purchase deeded timeshare loans, according to the DBRS presale. The Timeshare Loans are fixed rate, fully amortizing loans that are secured by first mortgage liens on Westgate Resorts properties.

Westgate’s new deal is the 6th ABS transaction for the issuer since the beginning of 2012. The five previous transactions were completed in 2012 and were also senior and subordinate structures.

Analysts at Bank of America Merrill Lynch said in an April 26, report that the asset class still offers investors good yield pick-up. The last timeshare transaction, Silver Leaf Resorts SRFC 2013-1, priced its 3.3yr single-A rated tranche at 100bp over swaps, according to a JP Morgan April 29, report.

Wyndham Worldwide, a more frequent issuer in the market, in March priced its 3.29-year, single-A notes at 100 basis points and its 3.29-year, triple-B notes at 180 basis points.

“Single-A rated classes still offer triple-digit spread levels, and triple-B rated classes have  priced at spreads between 150-250bp, depending on the issuer,” said the BofAML analysts. “Demand for higher yielding assets should be supportive of spreads.”


Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.