Wyndham Worldwide is planning its third securitization of timeshare loans of the year, according Fitch Ratings.
The $220 million transaction, called Sierra Timeshare 2015-3, will be backed by a pool of fixed-rate timeshare loans originated by Wyndham Vacation Resorts, Inc. (WVRI) and Wyndham Resort Development Corporation (WRDC). Approximately 64.9% of Sierra 2015-3 consists of WVRI-originated loans; the remaining are WRDC loans. The weighted average (WA) original FICO score of the pool is 719.
Fitch assigned 'A' ratings to $196.6 million of class A notes and 'BBB' ratings to $53 milluon of class B notes. All of the notes reach final maturity in September 2031.
The sponsor increased credit enhancement on the class B notes to 13.5% from 12.5% in Sierra Timeshare 2015-2, which was issued in August. Credit enhancement on the class A notes remain the same at 32.5%.
Wyndham's collateral pools tend to be less seasoned than those backing other timeshare loan securitizations. For example the Sierra Timeshare 2015-3 has loans that have on average made three months of installments and have a weighted average (WA) remaining term of 10 years. By comparison Mariott's MVW Owner Trust 2015-1, which was issued last August and is also rated by Fitch, is 42 months seasoned with a WA remaining term of 3.5 years. Historically, pools with lower seasonings tend to experience higher cumulative defaults relative to more seasoned pools, which have incurred a significant portion of their losses prior to their inclusion in a securitization.
The WA (original) FICO score of obligors in the 2015-3 pool at 719 is below the 722 FICO in series 2015-2 and 723 in the 2015-1 transaction. The last 10 transactions had WA FICO scores ranging from 714-723.
Credit Suisse is the lead underwriter.
