Wyndham Worldwide Corp. plans to issue $300 million of notes backed by timeshare receivables, according to a presale report published by Fitch Ratings.
Deutsche Bank Securities is the lead underwriter.
The deal, Sierra Timeshare 2014-1 Receivables Funding, will issue tranches of notes: Fitch expects to assign an A’ rating the $231.8 million class A notes and a BBB’ rating to the $68.2 million class B notes.
The notes are backed by a pool of fixed-rate timeshare loans originated by Wyndham Vacation Resorts, and Wyndham Resort Development Corp., two indirect, wholly owned operating subsidiaries of Wyndham Worldwide.
This is Wyndham Worldwide’s 24th Sierra transaction, according to the presale report. The mix of loans is consistent with prior deals, with Wyndham Vacation loans accounting for approximately 65.3% of the pool. Fitch has determined that, on a like-for-like FICO basis, Wyndam Resort Development’s receivables perform better than Wyndam Vacation’s. The weighted average original FICO score of the pool is 717.
Initial “hard” credit enhancement (a combination of overcollateralization, a letter of credit reserve account and subordination) is expected to be 34.50% and14.50% for class A and B notes, respectively. “Soft” credit enhancement is also provided by excess spread and is expected to be 9.89% per annum.