Marriott Vacations Worldwide Corporation announced the completion of its first timeshare receivable securitization of 2022, offered pursuant to Rule 144A and outside the United States in accordance with Regulation S under the Securities Act of 1933, as amended.
$375 million of notes were issued in the transaction, backed by a pool of approximately $383 million of vacation ownership loans from all of the Company’s timeshare brands. The overall weighted average interest rate of the Notes is 4.59 percent and the transaction has a gross advance rate of 98 percent.
The Notes were issued by MVW 2022-1 LLC (the “LLC”) in four classes: approximately $220 million of Class A Notes, approximately $77 million of Class B Notes, approximately $48 million of Class C Notes, and approximately $30 million of Class D Notes. The Class A Notes have an interest rate of 4.15 percent, the Class B Notes have an interest rate of 4.40 percent, the Class C Notes have an interest rate of 5.23 percent, and the Class D Notes have an interest rate of 7.35 percent.
Approximately $287 million of the loans were purchased on May 19, 2022, by the LLC, and all or a portion of the remaining loans may be purchased by the LLC prior to October 31, 2022. Of the $375 million in proceeds from the transaction, $94 million will be held by the LLC until it purchases all or a portion of the remaining loans or, if not used for that purpose, returned to the investors. In addition, approximately $98 million was used to repay all outstanding amounts previously drawn under MVW’s $350 million warehouse credit facility, approximately $7 million was used to pay transaction expenses and fund required reserves, and the remaining $176 million will be used for general corporate purposes. In connection with the 2022-1 securitization, the Company will redeem the VSE 2016-A transaction for approximately $38 million, with the majority of the loans acquired through the redemption to be purchased by the LLC.
