KBRA Assigns Preliminary Ratings to Octane Receivables Trust 2021-1
21 Abril 2021 - 2:31PM
Business Wire
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to
three classes of notes issued by Octane Receivables Trust 2021-1
(“OCTL 2021-1”), a powersports equipment loan ABS transaction.
OCTL 2021-1 will issue three classes of notes totaling $305.0
million. The transaction is expected to be collateralized by
approximately $305.0 million of fixed rate installment loans, made
to prime and non-prime borrowers as of the closing date. The
preliminary ratings reflect the initial credit enhancement levels
ranging from 16.85% for the Class A notes to 1.00% for the Class C
notes, which build to 20.85% and 5.00% for the Class A and Class C
notes, respectively.
Octane Lending, Inc. (“Octane” or the “Company”) originates
direct consumer loans and 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 40 original equipment
manufacturer brands (“OEMs”) and provides financing to customers
purchasing utility vehicles (“UTVs”), all-terrain vehicles
(“ATVs”), cruisers, sports bikes, personal watercraft, mowers, dirt
bikes, golf carts, snowmobiles, trikes and other powersports and
outdoor power assets. 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, Auto Loan ABS Global Rating Methodology
and Global Structured Finance Counterparty Methodology as part of
its analysis of the transaction’s underlying collateral pool, the
proposed capital structure, Octane’s historical static pool data,
2008 powersport credit bureau performance data used by Octane to
benchmark their performance, and static pool loss data for
comparable automobile finance companies. KBRA considered its
operational review of Octane, which was conducted at its Irving, TX
servicing center in October 2019, as well as several business
updates with the Company since that time. Operative agreements and
legal opinions will be reviewed prior to closing.
Click here to view the report. To access ratings and relevant
documents, click here.
Related Publications
- General Global Rating Methodology for Asset-Backed
Securities
- Auto Loan ABS Global Rating Methodology
- Global Structured Finance Counterparty 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) is a full-service credit
rating agency 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 pursuant to the
Temporary Registration Regime. In addition, KBRA is designated as a
designated rating organization by the Ontario Securities Commission
for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the
National Association of Insurance Commissioners as a Credit Rating
Provider.
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Analytical Contacts
Alla Mikhalevsky, CFA, Director (Lead Analyst) +1 (646) 731-3356
alla.mikhalevsky@kbra.com
Michael Pettigrew, Senior Analyst +1 (646) 731-1208
michael.pettigrew@kbra.com
Zara Shirazi, Senior Director +1 (646) 731-3326
zara.shirazi@kbra.com
Eric Neglia, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2405 eric.neglia@kbra.com
Business Development Contact
Ted Burbage, Managing Director +1 (646) 731-3325
tburbage@kbra.com