Octane Lending completed its $400 million recreational vehicle financing securitisation – bringing it to a total of $2.6 billion funded since starting the program in December 2019.
New York-based Octane lends to consumers for their purchases of various types of recreational vehicle – ATVs, sports bikes, snowmobiles, watercraft, mowers, golf carts, tractors and trikes.
The deal was issued in six tranches – from AAA-rated Class A-1 and Class A-2 tranches to a BB-rated Class E tranche of notes.
Note Structure
| Class | Rating (S&P/ KBRA) | Amount (US$m) | Average Life | Spread | Coupon |
|---|---|---|---|---|---|
| A-1 | A-1+/K1+ | 49.3 | 0.25 years | 45bps | 5.68% |
| A-2 | AAA/AAA | 206.5 | 1.39 years | 135bps | 5.88% |
| B | AA/AA+ | 42.8 | 2.71 years | 205bps | 5.89% |
| C | A/A | 51.8 | 3.37 years | 255bps | 6.24% |
| D | BBB/BBB | 25.3 | 4.03 years | 380bps | 7.38% |
| E | BB/BB | 24.1 | 4.24 years | ||
Structure Diagram
The deal benefits from collateral excess spread of 5.6%, a non-amortizing reserve fund of 1%, and initial over collateralization of 1.5%.