Harley-Davidson Completes Sale of Residual Interests in Securitized Consumer Loan Receivables to KKR and PIMCO

Harley-Davidson has sold 95% of its residual interests in securitized consumer loan receivables to KKR and PIMCO, generating over $230 million in proceeds and removing $1.8 billion in debt from its balance sheet. This transaction is part of the company's plan to transform Harley-Davidson Financial Services into a capital-light business model, with full completion expected by October 2025.

Harley-Davidson, Inc. (NYSE: HOG) has achieved a significant milestone in its strategic partnership with KKR and PIMCO, completing the sale of 95% of its residual interests in securitized consumer loan receivables. This transaction, which generated over $230 million in proceeds, represents a crucial step in transforming Harley-Davidson Financial Services (HDFS) into a capital-light business model [1].

The sale, which occurred on August 25, 2025, involved the transfer of residual interests representing approximately $2 billion in aggregate retail loan receivables and related debt of approximately $1.8 billion at June 30, 2025. The transaction was conducted at a premium to par value, securing substantial proceeds for Harley-Davidson [1].

Harley-Davidson Chairman, President, and CEO Jochen Zeitz commented on the achievement, stating, "Since we announced our strategic partnership with KKR and PIMCO earlier this quarter, we have made excellent progress on our path to completing the transaction, and we are pleased to have achieved this major milestone with our partners so quickly" [1].

The sale of residual interests is part of a broader strategy to transform HDFS into a more efficient and derisked business model. By eliminating approximately $2 billion in variable interest entities and $1.8 billion in debt from its balance sheet, Harley-Davidson aims to free up capital for other strategic priorities [1].

The remaining aspects of the transaction, including the sale of 4.9% common equity interests at an agreed $1.8 billion valuation to each partner, and the existing consumer retail loan receivables, are targeted to be completed by the end of October 2025 [1]. Upon completion, KKR and PIMCO's investment vehicles will begin acquiring new consumer retail loan receivables originated by HDFS, further solidifying the strategic partnership [1].

This transaction underscores Harley-Davidson's commitment to financial restructuring and its ability to navigate complex financial transactions. It also highlights the company's strategic vision to maintain its competitive edge in the motorcycle industry while addressing financial risks and enhancing operational efficiency [1].

References:
[1] Harley-Davidson Achieves Milestone in Strategic Partnership with KKR and PIMCO with Completion of Sale of Residual Interests in Securitized Consumer Loan Receivables. Retrieved from https://investor.harley-davidson.com/news/news-details/2025/Harley-Davidson-Achieves-Milestone-in-Strategic-Partnership-with-KKR-and-PIMCO-with-Completion-of-Sale-of-Residual-Interests-in-Securitized-Consumer-Loan-Receivables/default.aspx