Total monthly delinquencies and defaults on U.S. timeshare asset-backed securities (ABS) rose again in the first quarter of 2009 (1Q'09), according to the latest timeshare ABS index from Fitch Ratings.

Total delinquencies increased to 5.28% in 1Q'09, up over 65% from 3.20% as of March 2008. March levels receded slightly from the all-time highs for the index reached in February. This modest reduction is consistent with the seasonal performance improvement that is typically seen in timeshare ABS. Monthly defaults of .81% in March up 30% from .62% for the prior year reached the highest observed level for the index, as U.S. timeshare borrowers continue to struggle in the current economic environment.

'Despite the expectation for modest seasonal improvement, Fitch expects delinquency and default levels to remain well above historical standards, due to the continued economic pressure affecting timeshare borrowers,' said Brad Sohl, Director, in Fitch's ABS group. 'Negative rating actions however, are expected to be limited due to the significant growth in credit enhancement that has occurred in most transactions.' As such, Fitch's outlook for asset performance remains declining while the Rating Outlook remains Stable for the U.S. timeshare ABS sector.

Fitch's timeshare ABS index is an aggregation of performance statistics on pools of securitized timeshare loans originated by various developers. Expected cumulative gross defaults on underlying transactions can range from 10% to above 20%. While delinquencies and defaults may vary on an absolute basis, most transactions supporting the index exhibit similar overall trends.

The Fitch timeshare performance index summarizes average monthly delinquency (over 30 days) and monthly gross default trends tracked in Fitch's database of timeshare ABS dating back to January 1997 and is available on a quarterly basis.