NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of Orange Lake Timeshare Trust 2016-A (“ONGLT 2016-A”), a timeshare ABS transaction.
ONGLT 2016-A will issue two classes of notes totaling $176.19 million. The notes are collateralized by a pool of timeshare loans originated by the Originators. The timeshare loans are fixed rate installment loans, generally made to prime/non-prime borrowers, having an original loan term of 10 years, with a 10%-15% downpayment and paying an average interest rate of 14.80%. The time share property sold by Orange Lake Country Club, Inc. (“Orange Lake” or “OLCC”) substantially consists of one week interests available on an annual or biennial basis.
The preliminary ratings reflect the initial credit enhancement levels of 30.75% for the Class A notes and 11.00% for the Class B notes. Credit enhancement for the notes consists of the reserve account (which steps down to 1.00% after month 12), overcollateralization, excess interest on the receivables and subordination (except for the Class B notes.)
OLCC is a wholly-owned subsidiary of Orange Lake Holdings, LLP, which is a privately held company owned by the Kemmons Wilson family. Kemmons Wilson was also the founder of the Holiday Inn chain. OLCC was incorporated in Florida on March 5, 1981. OLCC and Intercontinental Hotels Group (“IHG”), which owns the Holiday Inn brand, entered a long-term and exclusive agreement to develop and operate resorts and market and sell timeshare interests using the Holiday Inn brand. Currently 22 resorts are branded as Holiday Inn Club Vacations resorts. OLCC also operates a timeshare exchange program called the Holiday Inn Club.
This transaction is OLCC’s fifth timeshare loan-backed securitization. The Company issued its first securitization, Orange Lake Timeshare Trust 2006-A, in 2006, then one securitization in each of 2013, 2014 and 2015.
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 OLCC’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.
Preliminary Ratings Assigned: Orange Lake Timeshare Trust 2016-A
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