CHICAGO--()--The proverbial winter blues kicked in as expected for U.S. timeshare ABS performance, with fourth quarter-2012 (4Q'12) delinquencies increasing from third quarter , according to the latest index results from Fitch Ratings.
Total 4Q'12 delinquencies were 3.55%, up from 3.28% in 3Q'12. Year-over-year total delinquencies decreased moderately compared to the 4Q'11 level of 3.82%. Delinquency trends have largely normalized at their historical levels following the dramatic increases that occurred in 2008 and 2009.
As expected, defaults for 4Q'12 increased, up to 0.75% from 0.60% in 3Q'12 but remain at the same level observed at the same time last year.
Fitch's Rating Outlook for timeshare ABS remains Stable. Partially driving the outlook is the delevering structures found in timeshare transactions and ample credit enhancement 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.
Fitch's quarterly index can be found at 'www.fitchratings.com' under the following headers:
Sectors >> Structured Finance >> ABS >> ABS Indices >> Timeshare
Additional information is available at 'www.fitchratings.com'.