Fitch Upgr Certain Classes Of Sunterra Corp Timeshare Securitizations.Business Editors NEW YORK--(BUSINESS WIRE)--Sept. 9, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. upgrades certain classes of the following Sunterra Timeshare A form of shared property ownership, commonly in vacation or recreation condominium property, in which rights vest in several owners to use property for a specified period each year. Securitizations: Signature Resorts Vacation Ownership Receivables-Backed Notes 1998-A -- Class A-2 to 'AA' from 'A'; -- Class A-3 to 'A+' from 'BBB'. Terrasun LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control Vacation Ownership Receivables-Backed Notes 1999-A -- Class B to 'AA' from 'A'; -- Class C to 'A' from 'BBB'; -- Class D to 'BBB' from 'BB'. Dutch Elm, LLC Vacation Ownership Receivables-Backed Notes 1999-B -- Class B to 'AA' from 'A'; -- Class C to 'A' from 'BBB'. All three deals experienced trigger events, which changed the pay structure from pro-rata to sequential pay and caused the reserve fund to be liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. and be passed through to investors in May 2000 when the servicer, Sunterra Corp. declared bankruptcy. Since that time, the company has reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. and in May of 2002, Sunterra emerged from bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. protection. Each of the transactions has accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. significant and continually-increasing amounts of overcollateralization. Fitch upgrades these classes of securities based primarily upon that increase. These actions effect $74.6 million of outstanding securities. The original and current (as of the July 2002 reporting date) overcollateralization for each of the three deals: Signature Resorts (series 1998-A) was 6% originally and is now approximately 58% Terrasun LLC (series 1999-A) was 3% originally and is now approximately 35% Dutch Elm LLC (series 1999-B) was 10% originally and is now approximately 50%. While Fitch recognizes the sheer volume of available enhancement to protect investors from loan losses, and notes the current amount of protection afforded to investors, Fitch is concerned that the servicer still represents some level of uncertainty given is recent history. Fitch continues to review the performance of both the collateral and the servicer for any further changes. |
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