Octane (Octane Lending, Inc.), the fintech revolutionizing the buying experience for major recreational purchases, announced that it has closed a $400 million securitization (“OCTL 2023-2”) collateralized by its fixed-rate installment powersports loans issued through its in-house lender, Roadrunner Financial, Inc.
OCTL 2023-2 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. The senior class of notes in Octane’s first asset-backed securitization of 2023, OCTL 2023-1, was also rated AAA by both S&P* and KBRA**.
Due to significant investor demand, Octane was able to secure an upsize of $400 million for the transaction from an initial target issuance of $300 million. The company continued to diversify its investor base by attracting several new investors through this issuance, while also maintaining the support of existing institutional investors. ATLAS SP Partners acted as lead manager and structuring agent, with J.P. Morgan and Truist Securities serving as joint bookrunners. This marks Octane’s eighth transaction to date.
“Our capital markets strategy continues to be a differentiator for Octane and our successful securitization program is a testament to the underlying strength of our business,” said Steven Fernald, Chief Financial Officer at Octane. “We’re grateful to our institutional investor partners for their support as we connect people with their passions and make buying better.”
“Octane’s end-to-end buying experience has fundamentally changed the way individuals can make lifestyle purchases, and we’re thrilled to have supported the company on its revolutionary securitization program,” said Thomas Pai, Head of Auto / Equipment Origination at ATLAS SP Partners. “We look forward to continuing to work with the team at Octane as it continues to innovate to capitalize on strong investor and consumer demand.”
This transaction follows a period of innovation for Octane. The company recently launched its newest digital soft pull tool, Prequal Flex, introduced advertising on its renowned Octane Media™ properties, which include Cycle World® and UTV Driver®, and rolled out a unique business-to-business (B2B) loyalty program, Octane Preferred, to its over 4,000 powersports dealer partners nationwide.
Octane has completed over $2.6 billion of asset-backed securitizations since launching the program in December 2019.