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Press Release: Sunterra Corporation
January 19, 2005
LAS VEGAS, NV -- Sunterra Corporation (NasdaqNM:SNRR) announced yesterday that it has issued formal notice to call
the TerraSun, L.L.C. Vacation Ownership Receivables-Backed Notes Series 1999-A securitization ("99-A facility"),
and anticipates a January 25, 2005 closing.
The 99-A facility was initiated in April 1999, issuing $104.0 million in fixed-rate notes (the "Notes")
backed by $106.8 million of vacation-ownership mortgages on Vacation Interests at Sunterra's North American resorts.
The Company exercised its early redemption option that allowed the Notes to be called and the vacation ownership
mortgages receivable to be transferred back to the Company when the aggregate outstanding balance of the Notes
was equal to or less than $10.4 million.
The Company expects to pay less than $8 million to obtain approximately 5,500 loans, including 3,300 loans less
than 60 days past due with an aggregate outstanding principal of $17.3 million and 2,200 loans over 60 days past
due with total unpaid principal of $17.3 million.
Under Sunterra's senior financing facility, the borrowing base value of the mortgages less than 60 days past due
is estimated at more than $11 million, with which the Company intends to pay the redemption price and reduce Vacation
Interest-backed debt. Following the closing, Sunterra intends to recover approximately 1,800 week-equivalents of
Vacation Interests that collateralize the 2,200 loans over 60 days past due. The Vacation Interests, with an estimated
retail value in excess of $23 million, are located at resorts within Sunterra's North American network of vacation
ownership resorts.
Within the next two months, the Company expects the unpaid principal obligation of its last remaining off-balance
sheet securitization, the Dutch Elm, LLC Vacation Ownership Receivables-Backed Notes Series 1999-B, to reach levels
at which Sunterra is eligible to exercise an early redemption option.
Sunterra Corporation is one of the world's largest vacation ownership companies with more than 300,000 owner member
families and 93 affiliated resort locations throughout the continental United States and Hawaii, Canada, Europe,
the Caribbean and Mexico. Sunterra news releases, as well as additional news and information on the Company, can
be found at www.sunterra.com.
Statements about future results made in this release, including projections regarding the number and expected retail
value of Vacation Interests, the remaining balance of the mortgages and Notes related to the 99-A facility and
the expected borrowing base value of the performing mortgages, as well as the Company's expectations regarding
the Dutch Elm, LLC Vacation Ownership Receivables-Backed Notes Series 1999-B securitization, constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based
on current expectations and the current economic environment. The Company cautions that these statements are not
guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking
statements. Important assumptions and other important factors that could cause actual results to differ materially
from those in the forward-looking statements are specified in Sunterra's Form 10-K for the period ended September
30, 2004.
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Contact:
INVESTOR CONTACT:
Bryan D. Coy
Sunterra Corporation
702-304-7005
investorrelations@sunterra.com
Source: Sunterra Corporation