KKR and PIMCO Acquire Harley-Davidson's Retail Loan Receivables Portfolio and Invest in Minority Stake.

KKR & Co. and PIMCO agreed to acquire Harley-Davidson's retail loan receivables portfolio on July 30, 2025. In a related transaction, KKR and PIMCO also acquired a 4.9% minority stake each in Harley-Davidson. The deal is expected to strengthen Harley-Davidson's balance sheet and provide additional liquidity for the company.

Harley-Davidson, Inc. (NYSE: HOG) announced a significant strategic partnership on July 30, 2025, with KKR and PIMCO, two leading global investment firms. The deal involves the acquisition of Harley-Davidson's retail loan receivables portfolio, totaling over $5 billion, and a minority stake in Harley-Davidson Financial Services (HDFS) [1].

The transaction is expected to unlock approximately $1.25 billion of discretionary cash for Harley-Davidson, which will be used to support demand-driven investments, reduce $450 million of HDI debt, and return approximately $500 million to shareholders [1]. This move aims to transform HDFS into a capital-light and derisked business, enhancing its strategic value to Harley-Davidson, its dealers, customers, and shareholders.

KKR and PIMCO will acquire approximately two-thirds of HDFS' annual retail loan originations over the next five years, with the remaining one-third retained by HDFS. The agreement includes a fixed servicing fee on loans purchased by KKR and PIMCO, providing HDFS with a new revenue stream [1]. Additionally, the firms have agreed to purchase 4.9% common equity interests in HDFS at an implied valuation of ~1.75x price to post-transaction book value [1].

The deal is anticipated to strengthen Harley-Davidson's balance sheet and provide additional liquidity. By reducing its overall leverage and perceived risk, the transaction is expected to lower Harley-Davidson's cost of capital on a go-forward basis. This strategic partnership is also expected to significantly increase the future return on equity (ROE) of HDFS while maintaining its well-capitalized status [1].

Harley-Davidson Chairman, President, and CEO Jochen Zeitz commented, "This transaction delivers benefits to all of Harley-Davidson's stakeholders and marks the beginning of an exciting new chapter for HDFS. We are pleased we were able to deliver such a successful strategic partnership for all of our stakeholders" [1].

References:
[1] https://www.prnewswire.com/news-releases/harley-davidson-announces-strategic-partnership-with-kkr-and-pimco-302517199.html