DBRS Morningstar Upgrades and Confirms 19 Ratings on Westgate and BXG Timeshare Transactions

DBRS, Inc. (DBRS Morningstar) took rating actions on 19 securities issued by eight series of timeshare asset-backed security transactions. Of the 19 securities, six were upgraded and 13 were confirmed. The eight series reviewed were as follows:

-- BXG Receivables Note Trust 2013-A
-- BXG Receivables Note Trust 2015-A
-- BXG Receivables Note Trust 2016-A
-- BXG Receivables Note Trust 2017-A
-- BXG Receivables Note Trust 2018-A
-- Westgate Resorts 2017-1 LLC
-- Westgate Resorts 2018-1 LLC
-- Westgate Resorts 2020-1 LLC

The rating actions are based on the following analytical considerations:

-- The transaction analysis considers DBRS Morningstar’s set of macroeconomic scenarios for select economies related to the Coronavirus Disease (COVID-19), available in its commentary “Global Macroeconomic Scenarios: January 2021 Update,” published on January 28, 2021. DBRS Morningstar initially published macroeconomic scenarios on April 16, 2020, that have been regularly updated. The scenarios were last updated on January 28, 2021, and are reflected in DBRS Morningstar’s rating analysis.

-- The assumptions consider the moderate macroeconomic scenario outlined in the commentary, with the moderate scenario serving as the primary anchor for current ratings. The moderate scenario factors in increasing success in containment during the first half of 2021, enabling the continued relaxation of restrictions.

-- The analysis accounts for the current state of the hospitality industry. While the industry has rebounded from the initial resort closures made at the onset of the pandemic, expectations of the timing of a full recovery of the industry, including fly-to destinations, remains unclear.

-- The ability of the transaction to withstand stresses in the cash flow scenarios and repay investors in accordance with the terms of the transaction.

-- The transaction parties’ capabilities with regard to origination, underwriting, and servicing.

-- The transaction’s capital structure, and form and sufficiency of available credit enhancement.

-- The transaction’s performance to date, with minimal defaults and losses.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
The principal methodology is the DBRS Morningstar Master U.S. ABS Surveillance (May 27, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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