TEXT-Fitch affirms 3 sierra timeshare receivables transactions

Thu Feb 28, 2013 1:43pm EST

Feb 28 - Fitch Ratings has taken rating actions on the notes issued by
various Sierra Timeshare Receivables transactions as detailed below:

Sierra Timeshare 2010-1 Receivables Funding, LLC
--Class A notes at 'Asf'; Outlook Stable.

Sierra Timeshare 2011-1 Receivables Funding, LLC
--Class A notes at 'Asf'; Outlook Stable;
--Class B notes at 'BBBsf'; Outlook Stable;
--Class C notes at 'BB-sf'; Outlook Stable.

Sierra Timeshare 2012-1 Receivables Funding, LLC
--Class A notes at 'Asf'; Outlook Stable;
--Class B notes at 'BBBsf'; Outlook Stable.

Key Rating Drivers

These affirmations reflect the ability of each transaction's credit enhancement
to provide loss coverage consistent with the current rating levels. The Stable
Rating Outlooks reflect Fitch's expectation that the notes will remain
sufficiently enhanced to cover the stressed loss levels consistent with the
current ratings for the next 12 to 18 months.

It is important to note that default performance in these transactions is above
Fitch's initial expectations. For the Sierra 2011-1 transaction, loss coverage
multiples at this time fall short of Fitch's expected multiples for the current
ratings. However, the seller has actively exercised its option to repurchase
defaulted loans, a practice to which Fitch does not give credit. Furthermore,
due to the delevering structure of the transactions, enhancement is adequate to
support the higher than expected default pace.

Fitch will continue to monitor economic conditions and their impact as they
relate to timeshare asset-backed securities and the trust level performance
variables and update the ratings accordingly.

Rating Sensitivity:
Unanticipated increases in the frequency of defaults could produce default
levels higher than the current projected base case default proxy and impact
available default coverage and multiples levels. Lower default coverage could
impact ratings and rating outlooks, depending on the extent of the decline in
coverage. In Fitch's initial review of the transaction, the notes were found to
have limited sensitivity to a 1.5x and 2.0x increase of Fitch's base case
default expectation. To date, the transaction has exhibited no defaults (due to
repurchases) and default performance is consistent with Fitch's initial
expectations. Default coverage and multiple levels are consistent with the
current ratings. A material deterioration in performance would have to occur
within the asset pool to have potential negative impact on the outstanding
ratings.


Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

The information used to assess these ratings was sourced from the issuer,
periodic trustee reports, note valuation reports, and the public domain.

Applicable Criteria and Related Research:
--'Criteria for Rating U.S. Timeshare Loan ABS' dated June 13, 2012;
--'Global Structured Finance Rating Criteria' dated June 6, 2012.

Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Criteria for Rating U.S. Timeshare Loan ABS
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