Press Release: Fitch Ratings
September 11, 2002
NEW YORK, NY -- Fitch Ratings upgrades certain classes of the following Sunterra Timeshare Securitizations:
Signature Resorts Vacation Ownership Receivables-Backed Notes 1998-A
Terrasun LLC Vacation Ownership Receivables-Backed Notes 1999-A
Dutch Elm, LLC Vacation Ownership Receivables-Backed Notes 1999-B
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 and be passed through to investors in May 2000 when the servicer,
Sunterra Corp. declared bankruptcy. Since that time, the company has reorganized and in May of 2002, Sunterra emerged
from bankruptcy court protection. Each of the transactions has accumulated 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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Contact:
Fitch Ratings, New York
Adam M. Kaplan, 212/908-0830
Sean P. Sheerin, 212/908-0247
or
Media Relations:
Matt Burkhard, 212/908-0540
Source: Fitch Ratings