Harley-Davidson Financial Issues $500 Million ABS

Harley-Davidson Financial Services heated up the securitization pipeline with a $500 million securitization, according to an April 27 presale report from Standard & Poor’s.

The Harley-Davidson 2015-2 Trust is backed by new and used motorcycle loans with an average Fico score of 711, an average original term of 73 months, and a weighted average seasoning of seven months, according to the report. Also, 65.1% of loans in the trust were for new motorcycles, while 34.9% were used.

This is largely unchanged from HDFS’s 2015-1 issuance of $700 million, which was backed by loans with an average Fico score of 710, an average loan term of 73 months, and a weighted average seasoning of seven months.

The majority of loans in the 2015-2 trust were originated by Eaglemark Savings Bank  – a wholly-owned subsidiary of Harley-Davidson Credit Corp., and the remainder by Harley-Davidson motorcycle dealers.

HDFS’s serviced portfolio grew modestly to 449,626 contracts totaling $5.19 billion as of Dec. 31, 2014, from $4.83 billion a year earlier, according to S&P. Total delinquencies as a percentage of the outstanding loan balance decreased to 3.64% from 3.73% as of Dec. 31, 2013.

“Harley-Davidson Credit has been securitizing motorcycle contracts from retail purchases between Harley-Davidson motorcycle dealers and customers since 1994,” S&P wrote in the report. “Since then, Harley-Davidson Credit has securitized approximately $22.7 billion in motorcycle contracts. Harley-Davidson Inc. is the U.S. market leader in the premium, custom, and touring segments of the heavyweight motorcycle market. Its domestic market share is approximately 53.3%.”