US Timeshare ABS Delinquencies Fall For 1st Time Since 2007

Total delinquencies in U.S. timeshare asset-backed securities fell in the fourth quarter, marking the first year-on-year improvement since 2007, Fitch Ratings said.

The delinquency rate was 4.89% during the quarter, down from 5.13% a year earlier though still up from 4.64% in the third quarter. Monthly defaults climbed to 0.83% in December from 0.76% in the third quarter, Fitch said.

On an annualized basis, defaults continue to breach historical peaks, reaching 9.44% in December, as U.S. timeshare borrowers--like others--continue to struggle in the current economic environment.

"Delinquency and default levels are still above historical norms and figure to weaken further throughout the rest of the winter," said Fitch director Brad Sohl. "As such, Fitch expects continued declines in asset performance, though ratings should remain stable."