Sierra Timeshares
As the country deals with the ramifications of an economic crisis that has brought many big name corporations to their knees, the call for transparency and accountability in the financial sector is echoing loudly across the country. This is especially true for those individuals and companies who have stakes riding on the real estate market. While the housing bubble in the United States has indeed burst, many consumers and businesses alike still have an invested interest in real estate proceedings, and this is more true than ever in the timeshare arena.
Because of this, those with a stake in timeshares should be aware of the latest news in regards to a recent timeshare transaction. According to Fitch Ratings, a deal involving Sierra Timeshares needs to have more review completed before it is officially rated. While this could indicate that the transaction is more solid than previously believed, it could also call into question the financial viability of the companies involved. Ultimately, the outcome could serve as either a green light or warning flag to potential investors.
The rating system offered by Fitch is a powerful tool, widely used by investors and businesses around the world to gauge the risks and likely benefits from involvement in various transactions conducted throughout the global economy and regional markets. To make its ratings and recommendations, Fitch closely monitors the credit markets, keeping track of all the financial deals in various regions throughout the world. Then, using scientifically based algorithms and other types of high level risk analysis, Fitch determines how secure the deal appears to be, and how likely it is to produce a meaningful return for all parties involved. Through the professional opinions issued by Fitch, companies and individuals can make more informed decisions regarding the viability of other companies and credit markets, better knowing which risks to take, and which ones to possibly shy away from.
One of the newer features offered by Fitch is SMARTview, which is where this latest news regarding the pending evaluation of the Sierra Timeshare transaction was first reported. SMARTview is a simple posting that breaks down all the deals and transactions examined during Fitch Rating’s monthly analysis process. This list is considered to be an all-in-one stop for those who like to keep a finger on the pulse of the financial markets around the world. Most of the transactions identified by SMARTview are considered not to be in need of further analysis.
However, some transactions are labeled “Under Analysis,” meaning that the Fitch experts intend to take a closer look at the transaction in question and reassess it with more attention to the sundry nuances and details, which usually results in reassigning a rating to that transaction, either upgrading it to a more secure transaction or downgrading it to one that is potentially more risky.
This tool is especially useful in the volatile and high stakes timeshare market, and as of May 13, 2009, the SMARTview identified six recent timeshare transactions that did not necessitate further examination. However, the Sierra Timeshares transaction was not among those six, and instead has been issued the label of “Under Analysis.” Because of this, this transaction is expected to receive its in depth analysis over the next thirty days.
The transaction, officially known as Sierra Timeshare 2004-1 Receivables Funding, LLC, is for $658 million dollars, which is more reason for stakeholders to keep an eye on this development. However, even with this “Under Analysis” distinction, it is not clear yet which way Fitch’s rating will change, nor is it clear what the impact will be for other investors or, more importantly, for timeshare owners. While many timeshares are owned and organized by larger corporations, which are often companies involved with other real estate deals or hotel management, that does not mean that the average timeshare owner should not be particularly aware in this case. After all, timeshares are a unique real estate deal, essentially serving as a form of joint ownership. Therefore, the strength of the umbrella company and the viability of its financial transactions can have an impact on the average timeshare owner, since all parties actually have a real economic stake in the timeshare’s financial status.
All parties involved with the Sierra transaction in question will have a better sense of the fallout of this rating action once Fitch finishes and reports its more in depth review in the coming weeks. More details on the rating process and how Fitch assesses transaction can be found on the Fitch Rating website, along with a detailed history of the company, its various awards and services, in addition to all the transactions in the current SMARTview analysis.
About the Author: The timeshare experts at Apex Professionals, LLC, concentrate on helping disillusioned timeshare holders to rid themselves of unwanted maintenance fees, unnecessary assessment costs, and to do away with those annoying high-interest mortgages by offering to take over unwanted timeshare agreements instantly. Related posts:
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