Fitch Downgrades Harley-Davidson Ratings
Fitch Ratings lowered the ratings for Harley-Davidson and its financial arm, Harley-Davidson Financial Services (HDFS), on Friday after the motorcycle manufacturer announced a decline in revenue and income for the second quarter 2009.
NEW YORK — Fitch Ratings lowered the ratings for Harley-Davidson and its financial arm, Harley-Davidson Financial Services (HDFS), on Friday after the motorcycle manufacturer announced a decline in revenue and income for the second quarter 2009.
Fitch lowered the long-term issuer default rating and senior unsecured debt to "BBB+" from "A-" for both Harley and HDFS. It also reduced the senior unsecured debt at Harley-Davidson Funding Corp. to "BBB+" from "A-."
Fitch affirmed at “F2” the short-term issuer default rating for HDFS and Harley-Davidson Funding Corp. It also said the ratings outlook is negative.
The downgrades affect $3.9 billion of debt at HDFS and $782 million of debt at Harley-Davidson.
Fitch said the ratings reflect the significant reduction of motorcycle shipments in 2009, rising unemployment in the United States and weakening credit metrics. The ratings firm said the downgrades also reflect concern that HDFS will incur higher borrowing costs once the federal Term-Asset Backed Securities Loan Facility ends.
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