Kroll Bond Rating Agency assigned preliminary rates to five classes of notes issued by Octane Receivables Trust 2023-2, a powersports equipment loan ABS transaction from Octane Lending.

OCTL 2023-2 will issue five classes of notes totaling $300 million. The transaction is expected to be collateralized by approximately $304.5 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, which range from 38% for the Class A notes to 2.5% for the Class E notes.

Octane Lending originates indirect consumer retail installment contracts through powersports and outdoor power equipment dealerships. Through its subsidiary, Roadrunner Financial, the company began offering financing products in June 2016. Octane partners with more than 40 original equipment manufacturer brands and provides financing to customers purchasing utility task vehicles, all-terrain vehicles, cruisers, sports bikes, personal watercraft, mowers, dirt bikes, golf carts, classic bikes, trikes, scooters, snowmobiles, tractors, trailers and pontoons. The company is headquartered in New York and services loans through its indirect subsidiary, Roadrunner Account Services, which is located in Irving, TX.