Wyndham Worldwide priced an upsized $350 million securitization of timeshare receivables. The deal was originally sized at just $250 million.
JP Morgan and RBS Securities are the lead managers; it was rated by Fitch Ratings.
The two tranches of 3.09-year notes priced at the tight end of guidance. The class A notes rated A’ priced at swaps plus 95 basis points and the class B rated BBB-’ notes priced at swaps plus 130 basis points.
Initial hard credit enhancement for the class A notes is 30.50% and 11.50% the class B notes. This is Wyndham Worldwide’s 25th Sierra transaction.
The notes are backed by a pool of fixed-rate timeshare loans originated by subsidiaries of Wyndham Worldwide that include: Wyndham Vacation Resorts, Inc. (WVRI), Wyndham Resort Development Corporation (WRDC) and Shell Vacations Club (Shell).
Sierra Timeshare Series 2014-2 is the first transaction to include receivables from the newly acquired Shell, according to the Fitch presale report. Shell receivables account for 3.4%, or equivalently 5.5% of the WVRI pool.
In the Shell clubs, purchasers acquire a membership interest and are assigned points that entitle the owners to use the resorts within the club but do not acquire real property interests. Shell resort operates as a separate resort system from WVRI and WRDC. However, Shell owners have the ability access WVRI and WRDC resorts by exchanging Shell points through external exchange programs such as RCI.
The weighted average FICO score of obligors in the 2014-2 pool at 715, remains consistent with prior transactions. The last 10 transactions have had WA FICO ranging from 715−723.