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Moody's lowers Harley-Davidson
Moody's Investors Service said it lowered the ratings of Harley-Davidson Funding Corp.: senior unsecured to Baa1 from A2 and short-term to Prime-2 from Prime-1.
The outlook is negative.
According to the agency, Harley-Davidson's ratings are based on a guarantee from Harley Davidson Financial Services, while the latter in turn benefits from a support agreement from Harley Davidson, Inc.
Moody's said that the downgrade reflects the severe cyclical downturn in U.S. motorcycle demand, the resulting erosion in the earnings and cash flow from the motorcycle operations, the need for Harley to continue rationalizing capacity, and the high level of losses and charge-offs that the company is expected to experience through 2010.
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