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ORLANDO - Marriott Vacations Worldwide Corporation (NYSE: VAC), a $2.01 billion market cap company currently trading at $58.29, has finalized a $450 million securitization of vacation ownership loans, the company announced today. The transaction involved offering notes to qualified institutional buyers in the United States and internationally, in compliance with specific securities regulations. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 3.34, indicating robust financial health.
The securitization, carried out by MVW 2025-1 LLC, features a blended interest rate of 5.16% and a gross advance rate of 98%. The offering attracted significant investor interest, with oversubscription rates more than tripling the available notes. "This securitization... underscores the resilience and confidence in our timeshare loan portfolio," said Jason Marino, Marriott Vacations’ Executive Vice President and Chief Financial Officer. Trading at an attractive P/E ratio of 9.5, InvestingPro analysis suggests the stock is currently undervalued, with comprehensive insights available in the Pro Research Report.
Approximately $459 million of vacation ownership loans across the company’s timeshare brands backed the issuance of three classes of notes. The Class A Notes, Class B Notes, and Class C Notes were issued at varying interest rates, with the proceeds intended for paying down existing credit facility obligations and supporting general corporate activities.
Marriott Vacations Worldwide is known for its vacation ownership resorts and extensive exchange network, including over 3,200 affiliated resorts worldwide. The company has a strong relationship with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development and marketing of vacation ownership products.
The notes have not been registered under the Securities Act of 1933 or any state securities law and are subject to specific sale restrictions. This information is based on a press release statement from Marriott Vacations Worldwide Corporation.
In other recent news, Marriott Vacations Worldwide reported a fourth quarter 2024 adjusted EBITDA of $185 million, surpassing both Citizens JMP’s and consensus estimates. The company has also provided initial guidance for 2024, forecasting a 4% growth in contract sales. Meanwhile, Marriott Vacations has secured new credit facilities totaling $1.25 billion, including an $800 million senior secured revolving credit facility and a $450 million delayed-draw term loan facility, which aims to refinance existing debt. This financial restructuring is expected to enhance the company’s liquidity and financial flexibility. In analyst updates, Jefferies adjusted its price target for Marriott Vacations to $60, down from $85, while maintaining a Hold rating, citing expected challenges in the timeshare industry. Morgan Stanley upgraded the stock rating from Underweight to Equalweight but reduced the price target from $67 to $57, reflecting ongoing challenges within the company. Despite these adjustments, Marriott Vacations’ enterprise value has dropped below pre-pandemic levels, indicating market adjustments to financial pressures. Citizens JMP maintained a Market Outperform rating with a $115 price target, highlighting the company’s premium offerings and potential growth initiatives.
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