Harley-Davidson Partners with KKR & Co. for Financial Transformation and Debt Reduction
- Harley-Davidson partners with KKR and PIMCO to transform its financial services into a capital-light model.
- The sale of 4.9% equity interests to KKR and PIMCO will eliminate $1.8 billion of debt from Harley-Davidson’s balance sheet.
- This collaboration aims to enhance Harley-Davidson's financial robustness and support sustainable growth for its stakeholders.
Harley-Davidson's Financial Transformation: A Strategic Partnership with KKR and PIMCO
Harley-Davidson, Inc. has recently achieved a pivotal milestone in its strategic collaboration with KKR and PIMCO, focused on transforming Harley-Davidson Financial Services (HDFS) into a capital-light and less risky business model. The company successfully completes the sale of 95% of its residual interests in specific securitized consumer loan receivables, bringing in gross proceeds exceeding $230 million. This transaction corresponds to approximately $2 billion in retail loan receivables and around $1.8 billion in related debt as of June 30, 2025. The move not only marks a significant step in HDFS's evolution but also enables the company to continue originating and servicing both new and existing retail loans, preserving strategic value for Harley-Davidson, its dealers, customers, and investors.
Moving forward, Harley-Davidson aims to finalize the remaining aspects of the transaction by the end of October, including the sale of 4.9% common equity interests to KKR and PIMCO at a valuation of $1.8 billion. This restructuring is anticipated to eliminate roughly $2 billion in variable interest entities and $1.8 billion of debt from the company’s balance sheet. The proceeds from the sale are crucial for supporting Harley-Davidson's capital allocation priorities. Jochen Zeitz, the Chairman, President, and CEO of Harley-Davidson, expresses satisfaction with the rapid progress made since the partnership announcement. He emphasizes the commitment to maintaining high service levels for dealers and customers while transitioning into the next phase of their collaboration.
In essence, this initiative represents a strategic maneuver to bolster Harley-Davidson's financial robustness while ensuring the company continues to serve its stakeholders effectively. By reducing debt and optimizing its capital structure, Harley-Davidson not only positions itself for sustainable growth but also enhances its overall operational efficiency. The partnership with KKR and PIMCO showcases a proactive approach in navigating the evolving financial landscape, ultimately setting the stage for a more resilient business model that aligns with the company's long-term vision.
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