DBRS Morningstar Assigns Provisional Ratings to Westgate Resorts 2022-1 LLC.
ENPNewswire-January 12, 2022--DBRS Morningstar Assigns Provisional Ratings to Westgate Resorts 2022-1 LLC
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Release date- 11012022 - DBRS, Inc. (DBRS Morningstar) assigned provisional ratings to the following classes of notes to be issued by Westgate Resorts 2022-1 LLC (the Issuer).
$105,000,000 Timeshare Collateralized Notes, Series 2022-1, Class A rated AAA (sf)
$78,000,000 Timeshare Collateralized Notes, Series 2022-1, Class B rated A (sf)
$71,500,000 Timeshare Collateralized Notes, Series 2022-1, Class C rated BBB (sf)
$21,000,000 Timeshare Collateralized Notes, Series 2022-1, Class D rated BB (sf)
The provisional ratings are based on DBRS Morningstar's review of the following analytical considerations:
(1) The transaction capital structure and form and sufficiency of available credit enhancement are commensurate with the proposed ratings. Credit enhancement is in the form of overcollateralization, subordination, amounts held in the reserve fund, and excess spread. Credit enhancement levels are sufficient to support the DBRS Morningstar-projected cumulative gross loss (CGL) assumption under various stress scenarios.
(2) The transaction assumptions consider DBRS Morningstar's baseline macroeconomic scenarios for rated sovereign economies, available in its commentary Baseline Macroeconomic Scenarios For Rated Sovereigns December 2021 Update, published on December 9, 2021. These baseline macroeconomic scenarios replace DBRS Morningstar's moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020. The baseline macroeconomic scenarios reflect the view that recent COVID-19 developments, particularly the new Omicron variant with subsequent restrictions, combined with rising inflation pressures in some regions, may dampen near-term growth expectations in coming months. However, DBRS Morningstar expects the baseline projections will continue to point to an ongoing, gradual recovery.
(3) The transaction has the ability to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the rating on the Class A Notes will address the timely payment of interest and the ultimate payment of principal on or before the Final Maturity Date. The ratings on the Class B, Class C and Class D Notes will address the ultimate payment of interest and the ultimate payment of principal on or before their...
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