Octane completes 10th ABS transaction following recent milestones
Octane has closed a $300 million securitization (“OCTL 2024-1“) collateralized by its fixed-rate installment powersports loans issued through its in-house lender, Roadrunner Financial.
OCTL 2024-1 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+ in a private offering according to Rule 144A under the Securities Act of 1933. The senior class of notes in Octane’s three asset-backed securitizations of 2023, OCTL 2023-1, OCTL 2023-2, and OCTL 2023-3, were also rated AAA by both S&P*** and KBRA**** upon issuance.
Truist Securities acted as lead book-running manager and structuring agent, with J.P. Morgan Securities, ATLAS SP Partners and Mizuho Americas serving as joint book-runners. Octane saw a high level of demand for its notes and expanded its investor base by attracting new investors through this issuance while maintaining the support of existing institutional investors.
“We’re excited we could take advantage of the favorable ABS market and close a successful transaction with the support of an ever-growing mix of esteemed partners,” says Steven Fernald, chief financial officer at Octane. “Our strong capital markets execution remains a key differentiator for Octane as we continue to grow our business in the months and years ahead.”
This is Octane’s tenth ABS transaction since launching the program in December 2019. The company has completed more than $3.3 billion of asset-backed securitizations to date. Last month, Octane announced the sale of $280M in whole loans to Yieldstreet, a leading private market investing platform. Octane’s capital markets strategy also includes committed warehouse facilities.
This transaction comes on the heels of several exciting milestones. Octane surpassed $4B in aggregate originations last week and, in January, the company announced a strategic agreement with Kawasaki, which closed 2023 GAAP net income profitable while growing its number of applications by 96 percent and launching three new innovative products.
*The full analysis for S&P’s ratings, including any updates, is available on the S&P Global Ratings website.
**KBRA’s ratings are subject to all of the terms and conditions outlined in the related report and KBRA’s website.
***The full analysis for S&P’s ratings for each of these transactions, including any updates, is available on the S&P Global Ratings website.
****KBRA’s ratings for each of these transactions are subject to all of the terms and conditions outlined in the related report and KBRA’s website.
