CHICAGO--(BUSINESS WIRE)--Fitch Ratings takes the following rating actions on Marriott Vacation Worldwide Owner Trust 2013-1:
--Class A notes affirmed at 'Asf'; Outlook revised from stable to Positive;
--Class B notes affirmed at 'BBBsf'; Outlook Stable.
KEY RATING DRIVERS:
The affirmation of class A and B notes reflects the ability of each transaction's credit enhancement to provide loss coverage consistent with the current rating levels. Although the transaction has performed well within Fitch's initial expectation, upgrades at this time are not applicable due to limited transaction amortization. The Outlook revision to the class A notes reflects the potential for a positive rating actions 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 and loss severity could produce loss levels higher than the current projected base case loss proxy and impact available loss coverage and multiples levels for the transaction. Lower loss coverage could impact ratings and Rating Outlooks, depending on the extent of the decline in coverage.
A base case loss proxy was determined for the remaining pool in this review. Consistent with the initial rating sensitivities conducted, various default timing sensitivities were conducted.
Under the more stressful default timing scenarios, the multiples for both classes of notes did compress but the impact was minimal given current enhancement levels. As such, continued strong performance and growing enhancement levels may result in ratings upgrade. Conversely, a material deterioration in performance would have to occur to have potential negative impact on the outstanding ratings.
Fitch's analysis of the Representations and Warranties (R&W) of MVWOT 2013-1 can be found in the following appendix: 'Marriott Worldwide Vacation Owner Trust 2013-1- Appendix' dated July 29, 2013. These R&Ws are compared to those of typical R&Ws for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' dated Apr. 17, 2012.
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'(June 9, 2014);
--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012);
--'Global Structured Finance Rating Criteria' (May 20, 2014);
--'Marriott Vacation Worldwide Owner Trust 2013-1' (July 29, 2013);
--'Marriott Vacation Worldwide Owner Trust 2013-- Appendix' (July 29, 2013).
Applicable Criteria and Related Research:
Criteria for Rating U.S. Timeshare Loan ABS
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749780
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
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=841478
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