- Octane successfully closed a $326 million asset-backed securitization (OCTL 2024-3), contributing to its milestone of surpassing $4 billion in ABS issuances since 2019.
- The securitization includes six classes of fixed-rate notes with high ratings from S&P and KBRA, reflecting Octane’s credit quality.
- J.P. Morgan Securities led the transaction, supported by prominent institutional partners, further diversifying Octane’s investor base.
- Octane achieved competitive pricing for its securities while continuing to expand into marine financing and launching key initiatives like RideNowFinance.
- With $5 billion in total loan originations and a Series E funding round completed, Octane cements its leadership in the recreational financing industry.
Overview of the $326 Million ABS
Octane® (Octane Lending, Inc.®), a leading fintech innovator transforming the recreational buying experience, announced the successful closing of a $326 million asset-backed securitization (ABS), designated as “OCTL 2024-3.” This latest transaction is backed by fixed-rate installment loans for powersports vehicles, originated through its proprietary lender, Roadrunner Financial®, Inc. To date, Octane has issued over $4 billion in ABS since the launch of its program in December 2019, marking a major milestone in its rapid growth trajectory.
Issuance Details
The OCTL 2024-3 issuance comprises six classes of fixed-rate notes: Class A-1, Class A-2, Class B, Class C, Class D, and Class E. These tranches received high ratings from both Standard & Poor’s (S&P)* and Kroll Bond Rating Agency (KBRA)**, ranging from A-1+/K1+ for Class A-1 to BB/BB+ for Class E. The private offering was conducted in compliance with Rule 144A under the Securities Act of 1933.
J.P. Morgan Securities served as the lead manager and structuring agent for the transaction, supported by joint bookrunners Atlas SP Securities, Mizuho, and Truist Securities. The transaction further expanded Octane’s investor base while maintaining robust support from existing institutional partners.
A Strategic Milestone for Octane
“Achieving over $4 billion in ABS issuances in less than five years is a testament to the trust our investors place in Octane,” said Steven Fernald, President and Chief Financial Officer at Octane. “The strong demand for our securities enabled us to reduce credit spreads significantly, achieving our most competitive pricing since 2021. This solid capital markets performance reinforces our ability to drive growth while upholding exceptional credit quality.”
Capital Markets Activity in 2024
Octane’s capital markets activity in 2024 has been particularly dynamic, with the completion of two prior securitizations (OCTL 2024-1 and OCTL 2024-2), a $500 million forward-flow agreement with funds managed by AB CarVal, and multiple whole loan sales totaling $480 million, including transactions with Yieldstreet and AB CarVal-managed funds. Additionally, the company established an evergreen forward-flow partnership with a credit union, highlighting its diversified funding strategy.
Continued Expansion and Innovation
In addition to its securitization achievements, Octane has reached several key milestones this year. The company successfully entered the marine financing market and introduced RideNowFinance, a private label solution in partnership with the largest powersports retailer in North America. Octane also celebrated surpassing $5 billion in total loan originations and completed a Series E funding round, further bolstering its position as a market leader.
About Octane
Octane® is redefining how consumers make recreational purchases by offering a fully integrated, digital buying journey. From financing powersports vehicles, RVs, and boats to supporting loan servicing, Octane streamlines every step of the customer experience. Through its Octane Media™ brands, including Cycle World® and UTV Driver®, the company inspires enthusiasts while providing quick prequalification and dealership connections.
Founded in 2014, Octane partners with over 40 OEM brands and collaborates with 4,000+ dealers nationwide. The company’s team of more than 500 professionals operates in remote and hybrid roles, driving its mission to connect people with their passions through technology and innovation.
FAQs
- What is the significance of Octane’s $326 million ABS issuance?
- It marks a key milestone in Octane’s growth, contributing to its surpassing of $4 billion in ABS issuances since 2019.
- What is OCTL 2024-3 backed by?
- The securitization is backed by fixed-rate installment loans for powersports vehicles, originated through Roadrunner Financial®, Inc.
- Who were the lead managers for the transaction?
- J.P. Morgan Securities served as the lead manager and structuring agent, supported by joint bookrunners Atlas SP Securities, Mizuho, and Truist Securities.
- What other achievements has Octane made in 2024?
- Octane completed two prior securitizations, entered the marine financing market, launched RideNowFinance, and surpassed $5 billion in loan originations.
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