S&P lowers Harley-Davidson

Standard & Poor's said it lowered its long-term corporate credit rating on Harley-Davidson Inc. to BBB+ from A.

The rating was removed from CreditWatch, where it was placed with negative implications on Nov. 19, and the outlook is stable.

The agency said the downgrade is based on its concerns about the motorcycle market in the near-to-intermediate term against the backdrop of the recession and its belief that Harley-Davidson's debt leverage is likely to increase in 2009. The company had relied more heavily on the securitization market for retail financing, often with three to four transactions per year, S&P said, and with this market remaining somewhat illiquid and becoming a more expensive source of funding than historically, Harley-Davidson may need to supplement securitization financing with more unsecured debt to help customers purchase its motorcycles.

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