Starwood Brings $166M Timeshare Issuance to Market
Despite recent reports that the hotel and resort sectors of the commercial mortgage work are suffering declining occupancy rates and rising delinquencies, a $166m timeshare mortgage securitization issuance from Starwood Vacation Ownership Portfolio Services entered the syndicate market this week. Starwood issued the securitization, which is 17% overcollateralized, on December 1. It's part of the largest weekly supply of new issuance in weeks, according to an asset-backed securities (ABS) research by Deutsche Bank Securities. The issuance comes as hotel property values and occupancy rates are on the decline, according to recent commentary by Fitch Ratings. Consumer demand for timeshares is also low, Fitch noted, and the sector’s experienced noticeable deterioration in delinquency and default performance. But the Starwood issuance -- Starwood (SVO) Timeshare Mortgage Corp 2009-B -- indicates not all investors are bearish on the resort industry. Investment banks lined up for the vacation ownership interest-backed notes, pooling funds as part of a syndicate deal. The deal, expected to close this week, attracted Credit Suisse Securities, JP Morgan Securities, Barclays Capital, Deutsche Bank Securities and RBS Securities. Credit-rating agency Standard & Poor's gave the deal a single-A preliminary rating. Write to Diana Golobay.