Octane – Grown Into A Category Leader

Octane Lending Inc (“Octane”) has issued a $380m securitization to finance loans that it makes to individuals. Octane finances the purchase of powersports vehicles and recreational vehicles – including dirt bikes, snowmobiles, all-terrain vehicles and personal watercraft.

This is Octane’s ninth deal since it’s first securitization in December 2019. It has raised a total of over $3bn in asset backed securities (ABS) so far.

The transaction is issued by Octane Receivables Trust 2023-3 and is structured in five term tranches from AAA to BB/BB- (S&P/KBRA) as well as a 1-year money market A-1/K1+ rated note.

Octane’s CFO Steven Fernald said: “This successful transaction will help fuel our continued growth as we connect people with their passions and make buying better.”

Octane was founded in 2014 and now has over 550 employees.

The Power Of Specialty Fintech + Securitization

Octane has built a market-leading platform in this segment. It has done this by using securitization to be able to lend at scale, and at low financing costs to its end customers. Using this to build a first-mover advantage, it has been able to build customer acquisition, partnership, technological and operational advantages that now give it a competitive advantage and level of market defensibility.

This is an example of the power of combining specialty fintech and securitization – using technology to be able to efficiently serve niche segments, and securitization to be able to lend at rates that are competitive to those at which banks and other large institutions can lend.

Fintechs are also able to use securitization technology to build their businesses – using securitization-markets standard origination, servicing, risk management and operational standards that will be needed to securitize.