Fitch Upgrades and Revises Outlook on Marriott Vacation Club Owner Trust 2012-1

CHICAGO--()--Fitch Ratings takes the following rating actions on Marriott Vacation Club Owner Trust 2012-1:

--Class A notes upgraded to 'AAsf' from 'Asf'; Outlook Stable;

--Class B notes affirmed at 'BBBsf'; Outlook revised to Positive from Stable.

KEY RATING DRIVERS:

The upgrade to the class A notes reflects strong performance, credit enhancement growth since closing and available loss coverage. Cumulative gross defaults have been well within Fitch's expectations to date.

The affirmation of class B notes reflects the ability of credit enhancement to provide loss coverage consistent with the current ratings as well as their subordinate position in the waterfall. The Outlook revision to the class B notes reflects the potential for a positive rating action in the next 12 to 18 months.

Fitch will continue to monitor economic conditions and their impact as they relate to timeshare asset-backed securities and the trust level performance variables and update the ratings accordingly.

RATING SENSITIVITY:

Unanticipated increases in the frequency of defaults could produce loss levels higher than the current expectations and impact available loss coverage. Lower loss coverage could impact ratings and Rating Outlooks, depending on the extent of the decline in coverage.

To date, the transaction has exhibited strong performance, well within Fitch's initial expectations with rising loss coverage. Due to the growing credit enhancement levels and increased loss coverage afforded to the notes, a substantial increase in defaults would have to occur to have a negative impact on the updated ratings.

Fitch's stress and rating sensitivity analyses are discussed in the presale report titled 'Marriott Vacation Club Owner Trust 2012-1', dated June 18, 2012, which is available on Fitch's web site.

Individual Representations, Warranties, and Enforcement Mechanisms reports are available for all structured finance transactions initially rated on or after Sept. 26, 2011 at www.fitchratings.com.

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

The information used to assess these ratings was sourced from the issuer, periodic trustee reports, note valuation reports, and the public domain.

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Timeshare Loan ABS' dated June 10, 2013;

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 17, 2012;

--'Global Structured Finance Rating Criteria' dated May 20, 2014;

--'Marriott Vacation Club Owner Trust 2012-1', dated June 18, 2012;

--' Marriott Vacation Club Owner Trust 2012-- Appendix' dated June 18, 2012.

Applicable Criteria and Related Research:

Criteria for Rating U.S. Timeshare Loan ABS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709841

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Marriott Vacation Club Owner Trust 2012-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681869

Marriott Vacation Club Owner Trust 2012-1 - Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682011

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831353

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Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari
Analyst
+1 312-368-3127
Fitch Ratings, Inc.
70 W Madison St.
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe
+1 312-368-3167
or
Committee Chairperson
Bradley Sohl
Senior Director
+1 212-908-0792
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari
Analyst
+1 312-368-3127
Fitch Ratings, Inc.
70 W Madison St.
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe
+1 312-368-3167
or
Committee Chairperson
Bradley Sohl
Senior Director
+1 212-908-0792
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com