Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three categories of tickets issued by Octane Receivables Trust 2021-2 (“OCTL 2021-2”), an ABS powersports equipment loan transaction.

OCTL 2021-2 will issue three classes of notes totaling $ 340.0 million. The transaction is expected to be secured by approximately $ 340.0 million of fixed rate installment loans, made to senior and non-senior borrowers at the closing date. The preliminary ratings reflect the initial credit enhancement levels ranging from 16.75% for Class A Notes to 1.00% for Class C Notes.

Octane Lending, Inc. (“Octane” or the “Company”) enters into direct consumer loans and indirect retail contracts through powersports and outdoor power equipment dealers. Through its subsidiary Roadrunner Financial, Inc. (“Roadrunner”), the Company began offering financing products in June 2016. Octane partners with more than 40 original equipment manufacturer brands ( “OEM”) and provides financing to customers who purchase utility vehicles (“UTVs”), all-terrain vehicles (“ATVs”), cruisers, sports bikes, personal watercraft (“personal watercraft”), lawn mowers , dirt bikes, golf carts, classic bikes, tricycles, scooters and snowmobiles. Octane’s customer demographics are a full spectrum of credit and include primary and secondary debtors. The Company is headquartered in New York, New York and provides loan services through its indirect subsidiary, Roadrunner Account Services, LLC (“RAS”), located in Irving, Texas.

KBRA has applied its General Global Rating Methodology for Asset Backed Securities and its Global ABS Rating Methodology for Automotive Lending, as well as its Global Structured Finance Counterparty Methodology and Global ESG Rating Methodology as part of its analysis of the collateral pool underlying the transaction, the proposed capital structure, Static historical data from the Octane pool, 2008 Powersports credit bureau performance data used by Octane to compare its performance and static pool loss data for comparable auto finance companies. KBRA reviewed its operational review of Octane, which was conducted at its service center in Irving, Texas, as well as periodic update calls with the company. Operational agreements and legal opinions will be reviewed prior to closing.

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Disclosures

Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.

A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of relevant key rating assumptions, if any) used to determine the credit rating is available in the information disclosure form (s) located here.

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Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.

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