Octane completes $380M asset-backed securitization
Octane has closed a $380 million securitization (“OCTL 2023-3“) collateralized by its fixed-rate installment powersports and recreational vehicle loans issued through its in-house lender, Roadrunner Financial, Inc. This transaction is Octane’s ninth since launching the program in December 2019 and third of 2023. The company has completed more than $3 billion of asset-backed securitizations to date.
OCTL 2023-3 issued six classes of fixed-rate notes: Class A-1, Class A-2, Class B, Class C, Class D, and Class E, which Standard & Poor’s (S&P)* and Kroll Bond Rating Agency (KBRA)** rated as A-1+/K1+, AAA/AAA, AA/AA+, A/A+, BBB/BBB, and BB-/BB+ respectively, in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended.
J.P. Morgan Securities acted as lead manager and structuring agent, with Truist Securities, ATLAS SP Partners, and Mizuho Americas serving as joint bookrunners. Despite a record amount of primary new issuance volume in the ABS market during September, Octane saw strong demand for its paper, which allowed the banking syndicate to price at or inside of guidance. Additionally, Octane continued to diversify its investor base while also maintaining the support of existing institutional investors.
“As we build on Octane’s strong capital markets program, a competitive advantage, we’re grateful for the support of our esteemed institutional investor partners,” said Steven Fernald, Chief Financial Officer at Octane. “This successful transaction will help fuel our continued growth as we connect people with their passions and make buying better.”
The senior class of notes in Octane’s first two asset-backed securitizations of 2023, OCTL 2023-1 and OCTL 2023-2, were also rated AAA by both S&P* and KBRA**. In July of 2023, S&P raised its ratings on eight classes of notes and affirmed its ratings on three classes of notes across three issuances.* In May of 2023, KBRA upgraded 14 classes of notes and affirmed seven classes across multiple issuances.**
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
*The full analysis for S&P’s ratings, including any updates, which you should review and understand, is available on spglobal.com and can be accessed for OCTL 2023-3, OCTL 2023-2, OCTL 2023-1, and recent upgrades and affirmations.
**KBRA’s ratings are subject to all of the terms and conditions set forth in the related report and KBRA’s website, which you should review and understand, and can be accessed for OCTL 2023-3, OCTL 2023-2, OCTL 2023-1, and the recent upgrades and affirmations.
