Harley-Davidson is reportedly nearing a deal to sell a substantial stake in its financing division, Harley-Davidson Financial Services (HDFS), to the private credit arms of Pimco and KKR, in a transaction valued at approximately $5bn, according to Bloomberg sources.

The potential agreement would cover HDFS’s current portfolio of motorcycle loans as well as rights to future originations, offering Pimco and KKR exposure to both the servicing platform and the underlying consumer credit. HDFS provides financing to Harley-Davidson and LiveWire customers, as well as inventory loans to dealers.

The move is part of Harley-Davidson’s broader strategy to unlock capital and strengthen its balance sheet amid a challenging operating environment. Sales have been pressured by competition from brands like Honda and BMW, with shares down about 22% year-to-date. The company is scheduled to report earnings on 30 July.

CEO Jochen Zeitz confirmed earlier this year that the HDFS transaction was progressing and had drawn significant investor interest. The company has also initiated a CEO succession search ahead of Zeitz’s expected retirement.

Private credit firms have increasingly targeted asset-backed lending platforms with recurring cash flows and strong collateral pools. Carlyle’s recent acquisition of residential solar lender Sungage Financial mirrors this trend, combining a servicing business with loan portfolio exposure.

Harley-Davidson has historically securitised its motorcycle loan receivables, making HDFS an attractive target for structured credit investors. The deal, which may close in the coming weeks, underscores the growing appeal of consumer finance assets in private markets.

Pimco, KKR, and Harley-Davidson have not commented on the ongoing negotiations.

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