FinTech Octane completes $326m asset-backed securitisation

By Gloria Mathias

Octane (Octane Lending, Inc.), the FinTech revolutionising the buying experience for recreational purchases, has closed a $326 million securitisation (OCTL 2024-3) collateralised by fixed-rate instalment powersports loans issued through its in-house lender, Roadrunner Financial, Inc.

Since launching the program in December 2019, Octane has issued more than $4 billion of asset-backed securities (ABS). This is the company’s 12th ABS transaction.

J.P. Morgan Securities acted as lead manager and structuring agent, with Atlas SP Securities, Mizuho, and Truist Securities serving as joint bookrunners. In this latest ABS transaction, Octane continued to diversify its investor base while also maintaining the support of existing institutional investors.

“Thanks to the support of our esteemed institutional investors, Octane reached a significant milestone with this transaction, issuing over $4 billion of asset-backed securities in less than five years,” said Steven Fernald, President and Chief Financial Officer at Octane. “We were pleased to see such high demand for our paper among both new and existing partners, which allowed our syndicate of banks to reduce credit spreads materially from their initial guidance through final pricing to our lowest levels since 2021. Our robust capital markets execution gives us even greater flexibility as we continue to grow our business while maintaining strong credit performance.”

In addition to completing two other asset-backed securitisations, OCTL 2024-1 and OCTL 2024-2, Octane has diversified its capital markets strategy in 2024. Notable transactions include a $500 million forward-flow deal with funds managed by AB CarVal, two separate whole loan sales totalling $280 million to Yieldstreet, an evergreen forward-flow transaction with a credit union, and a $200 million whole loan sale to funds managed by AB CarVal.

The ABS transaction announcement follows several milestones for the company. Octane recently entered the marine market, launched RideNowFinance, a private label partnership with Powersports retailers in North America, and surpassed $5B in aggregate originations. Earlier this year, Octane completed its Series E funding round.