NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of notes issued by Welk Resorts 2015-A (“Welk 2015-A”), a timeshare ABS transaction.
Welk 2015-A is expected to be collateralized by approximately $105 million of timeshare loan receivables at closing compared to an expected collateral balance of approximately $135 million after completion of the prefunding period. The prefunding feature allows up to $30 million (22%) of the collateral pool to be funded until 150 days after the closing date.
The preliminary ratings reflect the initial credit enhancement levels of 15.25% for the Class A notes and 6.50% for the Class B notes. Credit enhancement consists of overcollateralization, a cash reserve account, excess spread and, in the case of the Class A notes, subordination of the junior note class. This transaction is Welk Resort Group’s (“Welk”) first timeshare loan securitization in 2015 and its second overall.
Welk is a leading international hospitality development, management, sales and marketing company focused on the vacation ownership industry. The famous band leader and television celebrity, the late Lawrence Welk, started in the resort hospitality business in 1964. Welk has been in the timeshare business since 1984 and has an experienced management team with a diverse background in managing and developing resorts, selling vacation ownership interests, and underwriting and servicing loans.
Welk 2015-A consists of 100% points-based loans, which are secured by vacation ownership interests in one or more resorts in Welk’s Platinum Program. Welk’s Platinum Collection currently consists of 7 resorts, in 5 locations. Points-based system offers members greater flexibility in planning their vacations, compared to fixed deeded ownership interests.
KBRA applied its U.S. Timeshare ABS methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Welk’s historical static pool data. KBRA also conducted an operational assessment on the originator and servicer, as well as a review of the transaction’s legal structure and transaction documents. KBRA will also review the operative agreements and legal opinions for the transaction prior to closing.
For complete details on the analysis, please see KBRA’s Pre-Sale Report, Welk Resorts 2015-A Presale Report, which was published today at www.kbra.com.
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Preliminary Ratings Assigned: Welk Resorts 2015-A |
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| Class | Rating | Expected Initial Principal Balance | ||||
| A | A(sf) | $117,788,000 | ||||
| B | BBB+(sf) | $11,812,000 | ||||
17g-7 Disclosure:
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report: Welk Resorts 2015-A 17g-7 Disclosure Report
Related Publications: (available at www.kbra.com)
U.S. Timeshare ABS Rating Methodology
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
