Fitch Affirms Sierra 2011-3 & 2012-3's Ratings; Revises Outlooks to Positive

CHICAGO--()--Fitch Ratings has affirmed the ratings for the following two Sierra Timeshare Receivables transactions:

Sierra Timeshare 2011-3 Receivables Funding, LLC

--Class A notes at 'Asf';

--Class B notes at 'BBBsf';

--Class C notes at 'BBsf'.

The Rating Outlook has been revised to Positive from Stable.

Sierra Timeshare 2012-3 Receivables Funding, LLC

--Class A notes at 'Asf';

--Class B notes at 'BBBsf'.

The Rating Outlook has been revised to Positive from Stable.

KEY RATING DRIVERS

The rating affirmations reflect the ability of each transaction's credit enhancement (CE) to provide loss coverage consistent with the current ratings. The Positive Outlook designation for all classes of notes reflects strong performance to date and the expectation that CE is expected to increase resulting in higher stress loss coverage to all the notes.

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 affect ratings and Rating Outlooks, depending on the extent of the decline in coverage.

To date, the transactions have exhibited minimal defaults (due to repurchases) and default performance is consistent with Fitch's initial expectations. Default coverage and multiple levels are consistent with the current ratings. A material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.

Fitch's stress and rating sensitivity analyses are discussed in the presale reports titled 'Sierra Timeshare 2011-3 Receivables Funding, LLC (US ABS)' and 'Sierra Timeshare 2012-3 Receivables Funding, LLC (US ABS)', dated Nov. 10, 2011 and dated Oct. 24, 2012, which is available on Fitch's web site.

Fitch's analysis of the Representations and Warranties (R&W) of these transactions can be found in 'Sierra Timeshare 2011-3 Receivables Funding LLC - Appendix' and 'Sierra Timeshare 2012-3 Receivables Funding LLC - Appendix'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated April 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);

--'Global Structured Finance Rating Criteria'(Aug. 4, 2014);

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

--'Sierra Timeshare 2011-3 Receivables Funding LLC (US ABS)' (Nov. 2, 2011);

--'Sierra Timeshare 2011-3 Receivables Funding LLC - Appendix'(Nov. 2, 2011);

--'Sierra Timeshare 2012-3 Receivables Funding LLC (US ABS)'(Oct. 24, 2012);

--'Sierra Timeshare 2012-3 Receivables Funding LLC - Appendix'(Oct. 24, 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=749780

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

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

Sierra Timeshare 2011-3 Receivables Funding LLC (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=655057

Sierra Timeshare 2011-3 Receivables Funding LLC -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=655312

Sierra Timeshare 2012-3 Receivables Funding LLC (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693120

Sierra Timeshare 2012-3 Receivables Funding LLC - Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693295

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=869174

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Contacts

Fitch Ratings
Surveillance Analyst
Andrew Tinari
Director
+1-312-368-3127
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe
Director
+1-312-368-3167
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Surveillance Analyst
Andrew Tinari
Director
+1-312-368-3127
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Margaret Rowe
Director
+1-312-368-3167
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations:
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com