Harley-Davidson: HDFS to sell 4.9% interest to vehicles managed by KKR and PIMCO

“Our strategic partners have valued the HDFS business at approximately 1.75x post transaction book value. HDFS has agreed to sell a 4.9% common equity interest to investment vehicles managed by KKR (KKR) and PIMCO. HDFS will sell approximately two-thirds of HDFS future retail loan originations at a premium on an annual basis for five years. The transaction unlocks $1.25 billion in discretionary cash, representing approximately 40% of current Harley-Davidson (HOG) market capitalization. HDFS has agreed to sell over $5 billion of existing gross consumer retail loan receivables and residual interests in securitized consumer loan receivables at a premium. HDFS expects to use a portion of the proceeds to reduce indebtedness to optimize its post transaction capital structure.”