Harley-Davidson’s credit ratings get cut to junk by S&P

S&P Global Ratings cut Harley-Davidson Inc.’s credit grades to junk status on Wednesday, citing the company’s strategy to start selling lower-cost motorcycles to boost revenue.


The motorcycle maker’s plan could lift retail sales and market share, but will pressure profitability for some time, S&P said in a statement. The bond grader estimates that an adjusted measure of Harley—Davidson’s margins, in particular an adjusted Ebitda margin, will probably be around 5% to 6% in 2026.


It may take “several years” for margins to approach 10%, S&P said. In the near term, Harley-Davidson’s profitability faces pressure from restructuring expenses and tariff costs. Over the medium term, selling more lower-priced models could weigh on margins, the bond grader said.

Artie Starrs, Harley-Davidson’s chief executive officer, took the reins at the company in October. He aims to make bikes more accessible at a time when inflation and interest rates are relatively high. He is hoping to boost sales volumes by offering more lower-priced motorcycles, and then regain profit with higher sales and a robust parts and accessories business, which allows customers to customize their bikes.

S&P cut Harley-Davidson’s unsecured debt rating one notch to BB+, the highest junk level. Moody’s Ratings has the company at the equivalent of one notch higher, while Fitch has the firm two steps higher, both of which are investment grade.

As of March 31, Harley-Davidson had about $1.63 billion of long-term net debt outstanding, according to a quarterly filing.