Fitch Rates Harley-Davidson Financial Services, Inc.'s Commercial Paper Program 'F2'

CHICAGO--()--Fitch Ratings assigns a rating of 'F2' to Harley-Davidson Financial Services, Inc.'s (HDFS) $1.35 billion commercial paper (CP) program, based on the rating linkage and core importance of HDFS to its parent company, Harley-Davidson, Inc. (HOG, rated 'A-' with a Stable Outlook by Fitch) and the availability of unsecured bank facilities equal to at least 100% of the outstanding principal amount of the CP.

Historically, the $1.35 billion CP program was maintained by Harley-Davidson Funding Corp. (HDFC), as part of this transaction, HDFC was merged into HDFS. Thus, the new CP program at HDFS is effectively replacing the existing CP program at HDFC. With the merger complete, Fitch expects to withdraw the ratings of HDFC's commercial paper rating; however, the ratings assigned to HDFC's medium-term notes will remain outstanding until their maturity.

HDFS's new CP program includes an upstream guarantee by Harley-Davidson Credit Corp., which is also a guarantor for the existing HDFC CP program. The CP program will also be backed by one or more unsecured bank facilities with availability equal to at least 100% of the outstanding principal amount of the CP.

HDFS is the captive finance subsidiary of (HOG), a manufacturer of motorcycles. HDFS's long- and short-term Issuer Default Ratings are not expected to be affected by the new CP program or the merger of HDFC into HDFS as HDFS was already a guarantor for the HDFC CP program.

RATING DRIVERS AND SENSITIVITIES

The IDRs and senior debt ratings for HDFS are linked to those of its parent, as Fitch believes HDFS is core to HOG's overall franchise. HDFS's ratings reflect its close operating relationship with HOG, which is governed by a support agreement in favor of debt holders under which HOG must maintain HDFS's fixed charge coverage ratio at 1.25x and minimum net worth of $40 million.

Fitch assigns the following rating:

Harley-Davidson Financial Services, Inc.

--Commercial Paper 'F2'

Rating Outlook Stable

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);

--'Finance and Leasing Companies Criteria' (Dec. 11, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

Finance and Leasing Companies Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696720

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Contacts

Fitch Ratings
Primary Analyst (HDFS and HDFC):
Johann Juan, +1-312-368-3339
Director
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst (HDFS and HDFC):
Paul Ryndak, CFA, +1-312-368-3194
Director
or
Committee Chairperson (HDFS and HDFC):
Nathan Flanders, +1-212-908-0827
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst (HDFS and HDFC):
Johann Juan, +1-312-368-3339
Director
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst (HDFS and HDFC):
Paul Ryndak, CFA, +1-312-368-3194
Director
or
Committee Chairperson (HDFS and HDFC):
Nathan Flanders, +1-212-908-0827
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com