H-D Sells Off $600 Million of Senior Unsecured Notes

Harley-Davidson Inc. today priced an offering of $600 million of its senior unsecured notes as part of the company's plan to fund the ongoing motorcycle lending activities of its wholly owned finance company, Harley-Davidson Financial Services (HDFS).

Davis Selected Advisers, L.P., a long-time investor in Harley-Davidson, Inc. and the largest holder of company stock, and Berkshire Hathaway, Inc. each committed to purchase equal portions of the aggregate principal amount of the notes.

The offering is being made under the H-D's existing shelf registration for public offerings of securities, including debt. The notes will be due in 2014 and will bear interest at a rate of 15 percent per annum.

HDFS makes wholesale loans to dealers and retail loans to consumers. HDFS recorded an operating loss of $24.9 million for the fourth quarter ended Dec. 31, 2008, $63.5 million lower than the operating income in the year-ago quarter.

"This offering represents an important next step in executing our stated strategy for funding the lending activities of HDFS," said Tom Bergmann, Chief Financial Officer of Harley-Davidson, Inc and Interim President of HDFS.

"Our priorities for HDFS in 2009 are to continue to obtain funding for its lending activities, manage credit losses in this challenging environment and provide support to the Harley-Davidson dealer network," Bergmann said in a statement accompanying the OEM’s year-end financial statement released late last month.

The offering was arranged by Morgan Stanley. Citigroup, Deutsche Bank Securities, J.P. Morgan and Morgan Stanley acted as lead underwriters for the transaction.

- Submitted by Guido Ebert