Hilton Grand Vacations is preparing to sell $400 million in asset-backed securities (ABS) supported by a pool of fixed-rate timeshare loans, with several notable collateral changes.
Loans with original balances higher than $100,000 accounted for 16.1% of the pool, down from 20.3% in the 2025-2 pool of the Hilton Grand Vacations Trust, which analysts from Fitch Ratings considered positive credit characteristics.
The transaction will issue four tranches of notes, classes A through D, all of which have a legal final maturity of February 2043.
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Wells Fargo Securities is the lead underwriter for the deal, according to Fitch.
Fitch assigns AAA, A-, BBB- and BB- to classes A, B, C and D, according to the rating agency.
The A and B tranches account for the lion’s share of the issued notes, with $168.1 million and $128.3 million, respectively.
Initially, classes A, B, C and D benefit from credit enhancement levels of 61.60%, 30.15%, 13.90% and 4.80%, respectively. Those levels are higher compared with similar classes on the series 2025-2 deal, except for the class D notes, because the previous series did not issue one.
HGVT 2026-1 features several layers of credit protection, including overcollateralization, a reserve account and subordination which makes up its hard credit enhancement. Soft credit enhancement comes from excess spread, representing 7.18% of the note balance, the rating agency said.
Hilton Resorts Corporation, Diamond Resorts and Bluegreen Vacations originated the 15,407 timeshare loans in the pool, according to Fitch. They have an average balance of $26,492, with loans concentrated in California (13.1%), Florida (10.6%) and Texas (6.9%), the rating agency said.