NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA assigns preliminary ratings to five classes of notes issued by Octane Receivables Trust 2025-1 (“OCTL 2025-1”), a powersports equipment loan ABS transaction.
OCTL 2025-1 will issue five classes (six tranches) of notes totaling $284.1 million. The transaction will be collateralized by approximately $300.0 million of fixed rate installment loans, made to prime and non-prime borrowers as of the closing date. The ratings reflect the initial credit enhancement levels ranging from 28.95% for the Class A notes to 5.80% 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. (“Roadrunner”). The Company began offering financing products in June 2016. Octane partners with over 60 original equipment manufacturer brands (“OEMs”) and provides financing to customers purchasing utility vehicles (“UTVs”), all-terrain vehicles (“ATVs”), tractors, trailers, cruisers, sports bikes, personal watercraft (“PWC”), 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 (“RAS”), 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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Methodologies
- ABS: Auto Loan ABS Global Rating Methodology
- ABS: General Global Rating Methodology for Asset Backed Securities
- Structured Finance: Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
Doc ID: 1011718
Contacts
Analytical Contacts
Hollie Reddington, Senior Director (Lead Analyst)
+1 646-731-3375
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Michael Rotunno, Analyst
+1 646-731-1439
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Hyren Jain, Analyst
+1 646-731-1327
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Rahel Avigdor, Managing Director (Rating Committee Chair)
+1 646-731-1203
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Business Development Contact
Arielle Smelkinson, Senior Director
+1 646-731-2369
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