KBRA assigns preliminary ratings to five classes of notes that will be issued by Octane Receivables Trust 2024-3 (“OCTL 2024-3”), a powersports equipment loan ABS transaction.
OCTL 2024-3 will issue five classes (six tranches) of notes totaling $326.4 million. The transaction will be collateralized by approximately $340.0 million of fixed rate installment loans, made to prime and non-prime borrowers on the closing date. The ratings reflect the initial credit enhancement levels ranging from 27.20% for the Class A notes to 4.50% for the Class E notes.
Octane Lending, Inc. (“Octane” or the “Company”) originates indirect consumer retail installment contracts through powersports and outdoor power equipment dealerships through its subsidiary, Roadrunner Financial, Inc. The Company began offering financing products in June 2016. Octane partners with over 40 original equipment manufacturer brands and provides financing to customers purchasing utility task vehicles, all-terrain vehicles, tractors, trailers, cruisers, sports bikes, personal watercraft, mowers, dirt bikes, golf carts, classic bikes, trikes, scooters, snowmobiles, electric bikes, go-karts and pontoons. Octane’s customer demographic is full credit spectrum and includes prime and non-prime obligors. The Company is headquartered in New York, New York and services loans through its indirect subsidiary, Roadrunner Account Services, LLC, located in Irving, Texas.
KBRA applied its General Global Rating Methodology for Asset Backed Securities and Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the transaction’s underlying collateral pool, the proposed capital structure and Octane’s historical static pool data. KBRA considered its operational review of Octane, which was conducted at its Irving, TX servicing center, as well as periodic update calls with the Company. Operative agreements and legal opinions will be reviewed prior to closing.
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