DOW JONES NEWSWIRES
Monthly defaults on U.S. timeshare securitizations reached
another high in December, topping the previous index record at the
end of the third quarter, according to the latest timeshare ABS
index from Fitch Ratings.
Monthly gross defaults in December climbed to 0.75%, from the
previous high of 0.67% in September and from 0.57% a year
earlier.
Total delinquencies grew to 5.13% in December from 4.12% at the
end of the third quarter and 3.53% a year earlier.
Timeshare performance initially showed some resistance to the
economic slowdown last year, but its performance declined notably
as the credit crisis continued to worsen.
Total delinquencies and monthly defaults have climbed about 65%
from April through December, said Fitch director Brad Sohl.
"While timeshare loan performance is typically poorer during the
winter months than other times of the year, the magnitude of the
deterioration experienced in 2008 is significantly greater than
historical trends," Sohl said.
Fitch looks at performance statistics on pools of securitized
timeshare loans originated by various developers.
Hospitality companies, including Marriott International Inc.
(MAR), Wyndham Worldwide Corp. (WYN) and Starwood Hotels &
Resorts Worldwide Inc. (HOT), consistently reaped big profits by
financing timeshare purchases amid strong consumer demand. But with
the lockdown in credit markets and concerns that consumers are
shunning big-ticket purchases, some developers have scaled back
plans for new projects.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com