Powersports lender Octane Lending plans to fund originations growth after securing a forward-flow agreement with Equitable, MetLife Investment Management and New York Life Insurance.
The $700 million deal, announced today, continues New York City-based Octane’s efforts to diversify its funding sources, President and Chief Financial Officer Steven Fernald told Auto Finance News.
“This capital allows us to not be reliant solely on our warehousing or the [securitization] markets,” Fernald said.
In forward-flow agreements, one entity sells assets to another continuously. Financial services organization Equitable and mutual life insurance companies MetLife Investment Management (MIM) and New York Life will buy fixed-rate powersports loans through Octane’s in-house lender, Roadrunner Financial, which will retain servicing of the loans, according to Octane.
The deal is a renewable one-year agreement, an Octane spokesperson told AFN.
Lead investor New York Life agreed to fund up to $350 million in Octane loans, while:
- MIM agreed to fund up to $200 million; and
- Equitable would fund up to $150 million.
Diversified funding
The deal marks Octane’s largest forward-flow deal to date and its second transaction involving funds managed by life insurance providers, according to an Octane release.
The lender also established a whole loan sale deal with investment manager Nuveen in March, a forward-flow deal with Georgia’s Own Credit Union in January and a $500 million agreement with alternative asset manager AB CarVal in September 2024.
Octane has issued 13 asset-back securitization (ABS) transactions since 2019, including a $127.5 million ABS deal backed solely by RV and marine loans in December 2024.
Continued origination growth
Q1 remained strong for Octane, with favorable performance in delinquencies, credit and charge-offs, Fernald said.
“There’s been no drop off in terms of [investor interest], which is a testament not only to the quality of the assets themselves … but also the strength of those relationships and how favorably Octane is viewed and how our partners who are buying these loans are viewed,” — Steve Fernald, Octane Lending
The powersports lender’s originations climbed 36% year over year to more than $1.6 billion in 2024, according to Octane. Despite looming tariff concerns and broader economic uncertainty, the company plans to grow in 2025, Fernald said, noting he expects originations to increase “materially” across RV and marine in 2025.
“We remain cautiously optimistic that 2025 will be a terrific year for Octane, and that ultimately the headwinds that many folks are facing right now will begin to subside,” he said.
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