Westgate Resorts is planning a $94 million securitization of timeshare loans, its third for 2012, according to a presale report published Wednesday by Standard & Poor’s.
S&P has assigned a preliminary ‘A’ rating to a $66.5 million tranche with 41.9% subordination and overcollateralization and a ‘BBB’ rating to a $27.5 million tranche with 17.89% subordination and overcollateralization.
Westgate Resorts 2012-3, which is backed by 13,256 deeded vacation interval ownership loans with a combined principal balance of approximately $114.5 million, is expected to close Dec. 18.
Wells Fargo Bank is the trustee, custodian and backup servicer.
Westgate has 21 resorts throughout the U.S. and services more than $1.0 billion performing deeded timeshare mortgages across more than 100,000 accounts, according to the presale report. Based on the aggregate loan balance, the series 2012-3 transaction's collateral will consist of loans from eight different resorts in the Westgate system. Approximately 68.9% of the loans in the portfolio are deeded to resorts in the Orlando, Fla. area.
The series 2012-3 transaction includes two classes of fixed-rate notes in a pro-rata turbo structure that pays interest sequentially and principal pro rata, and uses excess cash flows to pay down principal on all three classes, also pro rata.
Westgate has been touting the benefits of securitization. In October the company issued a statement saying the securitization market has allowed it to lock in fixed rate capital while refinancing risk. Its latest deal, a $221 million securitization, came to market in September. Prior to that, it obtained a $35 million revolving senior warehouse facility with Capital One Bank. Westgate also brought a $165 million securitization to market in April.