A day after Harley-Davidson reported quarterly earnings that disappointed Wall Street, the famed motorcycle maker got a warning that its debt ratings may be cut to junk by spring.
S&P Global Ratings said late Wednesday it placed its credit ratings on Harley-Davidson
HOG-0.84% on a negative watch. That means S&P could cut its ratings on the company’s bonds in the near future. The agency rates Harley-Davidson’s debt BBB-, the last rung of investment grade.
A slide into junk-bond territory would be a major negative credit event that would hamper the motorcycle maker’s ability to borrow money, and shut out its bonds from a much larger pool of investors, including pension funds, that can only own investment-grade debt.
S&P said it would wait to take action until it can assess the company’s new turnaround plan, which they expect Harley to announce in May.
“While the company has announced its intention to achieve approximately $150 million of cost savings and leverage its core product portfolio to return to sustainable growth, we remain unsure of how long it may take for Harley to restore its operating margin to a level commensurate with a BBB- rating,” S&P said.
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- YOU’RE NOT A 1%er SATANS CHOICE MC
INSANE THROTTLE 
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