Fitch Affirms Elara HGV Timeshare Trust, 2014-A

CHICAGO--()--Fitch Ratings has affirmed both classes of notes on Elara HGV Timeshare Trust, 2014-A.

--Class A at 'Asf'; Outlook Stable;

--Class B at 'BBBsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmations to both classes of notes reflect performance within Fitch's initial expectation, growth in hard credit enhancement (CE) since close, and available loss coverage consistent with the current ratings. The Stable Rating Outlooks reflect Fitch's expectation that the notes will remain sufficiently enhanced to cover the stressed loss levels consistent with the current ratings.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults could produce CGD levels higher than the base case and would likely result in declines of CE and remaining default coverage levels available to the notes. Additionally, unanticipated increases in prepayment activity could also result in a decline in coverage. Decreased default coverage may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage.

Fitch conducts sensitivity analysis by stressing both a transaction's initial base case CGD and prepayment assumptions by 1.5x and 2.0x and examining the rating implications on all classes of issued notes. The 1.5x and 2.0x increases of the base case CGD and prepayment assumptions represent moderate and severe stresses, respectively, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust's performance.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)

https://www.fitchratings.com/site/re/886006

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/site/re/882401

Criteria for Rating U.S. Timeshare Loan ABS (pub. 16 Jun 2016)

https://www.fitchratings.com/site/re/882873

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/site/re/883130

Related Research

Elara HGV Timeshare Issuer 2014-A, LLC - Appendix

https://www.fitchratings.com/site/re/792228

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1011176

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1011176

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari
Associate Director
+1-312-368-3127
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Andrew Tinari
Associate Director
+1-312-368-3127
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-0214
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com