Fitch: U.S. Timeshare ABS Delinquencies Settle into Historical Patterns

CHICAGO--(BUSINESS WIRE)--U.S. timeshare delinquencies rose during the last quarter as expected yet remain consistent with levels from a year ago, according to the latest timeshare ABS index from Fitch Ratings.

Total delinquencies for third-quarter 2011 (3Q'11) were 3.56%; up from 3.28% in 2Q11. This reflects the seasonal deterioration that takes hold in the fall and winter. Total delinquencies are virtually unchanged from the 3.55% delinquency rate in 3Q'10. Year-over-year improvements observed in recent years have ceased, as delinquencies have receded to levels closer to historical norms.

Monthly defaults for September declined to 0.62% from 0.80% in June and are also unchanged from the same period last year. Default trends typically lag those of delinquencies, and are expected to mirror the recent increase in delinquencies in the coming months.

Fitch's Rating Outlook for Timeshare ABS remains stable due to near-term performance expectations, de-levering structures by note amortization in most timeshare transactions and ample credit enhancement at current levels.

Fitch's timeshare ABS index is an aggregation of performance statistics on pools of securitized timeshare loans originated by various developers. Expected cumulative gross defaults on underlying transactions can range from 10% to above 20%. While delinquencies and defaults may vary on an absolute basis, most transactions supporting the index exhibit similar overall trends.

The Fitch timeshare performance index summarizes average monthly delinquency (over 30 days) and gross default trends tracked in Fitch's database of timeshare asset backed securities (ABS) dating back to January 1997 and is available on a quarterly basis. Prior levels of the timeshare ABS index have been restated to reflect slight changes in the composition of the index this past quarter.

Fitch's quarterly index can be found at 'www.fitchratings.com' under the following headers:

Sectors then Structured Finance then ABS then ABS Indices then Timeshare

Additional information is available at 'www.fitchratings.com'

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.