Octane adds to investor base with $407MM ABS

Octane, the fintech dedicated to revolutionizing the buying experience for major recreational purchases, announced that it has completed a $406.9 million asset-backed securitization (ABS) collateralized by its fixed-rate installment powersports loans. This is the largest of Octane’s seven transactions to-date and the first to receive a AAA-rating from both Standard & Poor’s (S&P) and Kroll Bond Rating Agency (KBRA).

This transaction, OCTL 2023-1, issued five classes of fixed-rate notes: Class A, Class B, Class C, Class D and Class E, which S&P and KBRA rated as 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. This transaction follows a period of significant growth and expansion into new markets for Octane.

Through this issuance, the company continued to diversify its investor base with seven new investors, which is a testament to the strength and growth of the program. Due to significant investor demand, Octane was able to secure an upsize of the transaction from an initial target issuance of $305.2 million to $406.9 million in notes. Truist Securities acted as lead bookrunner and structuring agent, with J.P. Morgan as joint bookrunner. 

“We’re pleased and grateful to see such strong interest from our institutional investor partners, particularly in the current market environment, and will leverage their support to bring our fast, easy buying experience to even more customers,” said Steven Fernald, chief financial officer, Octane. “Our capital markets strategy is one of Octane’s many differentiators and we will continue to build on the strength of both our program and underlying business in the future.” 

In both of Octane’s two asset-backed securitizations in 2022,  OCTL 2022-1 and OCTL 2022-2, the senior class of notes were rated AAA by Kroll Bond Rating Agency (KBRA) and AA by S&P. The company has now completed nearly $2.3 billion of asset-backed securitizations since launching the program in December 2019.

As Seen On Powersports Business