#United States #Harley-Davidson #Milwaukee #KKR #PIMCO

Harley-Davidson's Strategic Partnership Milestone

On August 25, 2025, Harley-Davidson announced the successful completion of the sale of its residual interests in securitized consumer loan receivables. This milestone is part of the broader strategic partnership with KKR, a prominent global investment firm, and PIMCO, a leader in active fixed income. The aim of this collaboration is to transform Harley-Davidson Financial Services (HDFS) into a capital-light and less risky business model, enabling it to focus on originating and servicing both new and existing retail loans effectively.

The recent transaction marks a pivotal step in the partnership, generating gross proceeds exceeding $230 million through the sale of 95% of the residual interests, which represent around $2 billion in retail loan receivables. With related debt of approximately $1.8 billion reported on June 30, 2025, this transaction significantly alleviates Harley-Davidson's financial obligations.

Key Transaction Details

The sale included a substantial amount of consumer loan receivables, allowing Harley-Davidson to eliminate around $2 billion in variable interest entities from its balance sheet. Jochen Zeitz, the Chairman, President, and CEO of Harley-Davidson, expressed optimism about the progress made since the partnership's announcement earlier in the quarter. He highlighted the importance of this transaction in meeting the company's capital allocation priorities and emphasized its alignment with the overarching strategy to eliminate unneeded debt.

Zeitz stated, “We are on track to complete the transaction as planned and begin the next phase of our partnership, all while continuing to deliver outstanding service levels for our dealers and customers. This transaction delivers benefits to all of Harley-Davidson's stakeholders and marks the beginning of an exciting new chapter for HDFS.”

Future Implications

As the transaction progresses, Harley-Davidson aims to expedite the sale of the remaining 4.9% common equity interests to each of its partners at an agreed valuation of $1.8 billion. Additionally, HDFS plans to initiate the acquisition of new consumer retail loan receivables, further solidifying its role in financing while maintaining strategic value.

The partnership is designed not only to solidify HDFS's financial framework but also to enhance its operational agility and capacity to serve customers effectively. The strategic direction towards a capital-light business model is expected to yield long-term benefits, positioning Harley-Davidson favorably in a competitive market.

About Harley-Davidson

Founded in 1903, Harley-Davidson has been at the forefront of motorcycle culture, known for its customizable motorcycles and unique lifestyle. The company not only builds machines but also fosters a sense of adventure and freedom through its offerings. Over the years, Harley-Davidson has maintained its status as the leading motorcycle brand globally, enhancing its services through Harley-Davidson Financial Services, which provides financing and insurance options to riders.

Looking Ahead

The collaboration with KKR and PIMCO reflects Harley-Davidson’s proactive approach towards modernizing its financial strategies and fortifying its balance sheet. As Harley-Davidson gears up for this transitional phase, stakeholders remain optimistic about the company’s future directions and potential for innovative growth.

In conclusion, this milestone achievement in the partnership signifies a strategic shift for Harley-Davidson, setting the stage for enhanced financial health and operational expansion. The focus on transforming HDFS into a more robust, less risky entity represents a long-term vision for sustainability and growth in an evolving market landscape.

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