WASHINGTON (dpa-AFX) - Harley-Davidson (HOG) announced that HDFS has entered into a long-term strategic partnership with KKR, and PIMCO. This partnership transforms HDFS into a capital-light financing business through the sale of existing and future retail loans. HDFS will also sell 4.9% common equity interests to investment vehicles managed by KKR and PIMCO. HDFS has agreed to sell over $5 billion of existing gross consumer retail loan receivables and residual interests in securitized consumer loan receivables at a premium.
Harley-Davidson will retain control of HDFS. The company expects HDFS operating income to grow back toward pre-transaction levels over time.
Harley-Davidson plans to use the approximately $1.25 billion of cash unlocked through the transaction to reinvest to support demand-driven investments, reduce $450 million of HDI debt and return approximately $500 million to shareholders.
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