Fitch: Timeshare ABS Defaults Hit All-Time High In Dec

   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; [e-mail]