Summary
Marriott International, Inc. (MAR) filed an 8-K on October 21, 2009, detailing a significant timeshare mortgage loan securitization and sale. The company sold approximately $380 million in timeshare mortgage loans to a newly formed trust (Marriott Vacation Club Owner Trust 2009-2). In conjunction with this sale, investors purchased $317 million of timeshare loan-backed notes from the trust. This transaction allowed Marriott to pay off its previous timeshare loan-backed notes issued in March 2009 and reacquire some of the associated mortgage loans, approximately $218 million of which were included in the current sale. The company received $168 million in cash proceeds from the sale, net of amounts paid to unwind the prior transaction, and will retain a subordinated residual interest in the new trust, from which it expects to realize further value over time. Marriott anticipates recognizing a gain of approximately $37 million in the fourth quarter of 2009 related to these transactions.
Key Highlights
- 1Marriott sold approximately $380 million in timeshare mortgage loans through a securitization vehicle.
- 2Investors purchased $317 million in 4.809% Timeshare Loan Backed Notes from the new trust.
- 3The transaction effectively unwinds a previous timeshare loan securitization from March 2009.
- 4Marriott reacquired approximately $218 million of timeshare mortgage loans from the prior trust.
- 5The company received net cash proceeds of approximately $168 million from the sale.
- 6Marriott will retain a subordinated residual interest in the new trust, expecting future value realization.
- 7An estimated gain of $37 million is expected to be recognized in Q4 2009 due to these transactions.