Westgate Resorts said that the securitization market has allowed the company to lock in fixed-rate capital while eliminating refinancing risk on these portfolios.
In September Westgate issued its latest deal, a $221 million securitization of timeshare, which follows a $35 million revolving senior warehouse facility with Capital One Bank and a $165 million securitization that Westgate completed earlier this year.
The company said in a press release today that it recently closed on the latest deal. Westgate said that through its capital markets transaction, the company has access to a large number of new investors, including money funds, insurance companies, and hedge funds and lock in financing at cheaper fixed-rate costs. The weighted average costs of these deals are less than the previous floating rate expenses the company paid for financing.
"Westgate is operating at the highest profit levels in the history of the company," said David Siegel, Westgate Resorts' president and CEO.
The securitization deals the company issued this year were used to pay down existing debt and provide additional liquidity for the company. Westgate said in the press release that the four-year facility provided by Capital One will be used to finance notes receivable arising from the sale of vacation ownership intervals at Westgate's resort properties.