KKR/PIMCO HDFS Deal Eliminated $5.5bn of HDI Balance Sheet Debt
In a mid-April Audio Webcast for investors, Harley-Davidson Financial Services (HDFS), management was keen to make it clear that dealer support remains unchanged.
The 'capital light' model that the changes implemented are entirely on the corporate side and "strategic value driven," explained Johnathen Root, CFO/CCO of Harley-Davidson Inc.
Some 9.8% ownership equity in HDFS was sold to investment groups PIMCO and KKK to unlock the capital that was funding consumer debt.
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| Jonathen Root - Chief Financial and Commercial Officer, HDI |
"Dealer and customer financing operations will remain largely unchanged. HDFS will still play a strategic role in supporting motorcycle sales." The new funding structure will be largely invisible to dealers and customers, "with motorcycles continuing to get financed in the dealership," added Charles Do, SVP at HDFS.
In the future, HDFS expects to sell about two-thirds of new retail loans to its partners, while retaining the remaining one-third. The company will continue to originate and service all loans, earning servicing fees in the process.
"We anticipate the transaction will transform HDFS into a less capital-intensive and derisked business model," said Root. Stating that the new structure "affords a high degree of optionality in how we fund and run that business and an opportunity to grow the loan assets over time."
The restructuring also strengthened Harley's overall financial position. Consolidated net debt declined from $5.9bn at the end of 2024 to approximately $400m at the end of 2025.
