S&P Global lowered Harley-Davidson’s long-term credit rating from BBB- to BB+ on July 9, 2026, officially pushing the Milwaukee brand into speculative-grade—or “junk”—territory. That word alone is enough to give Road Glide shoppers pause. But for riders comparing financing options at dealerships right now, the practical results are much quieter than the headlines.
The reason for the downgrade is S&P’s skepticism about Harley’s “back to bricks” turnaround strategy, which was announced in May under CEO Artie Starrs. The plan pivots toward lower-priced models — a returning Sportster and a new entry-level Sprint at around $10,000 — to draw young and first-time riders. S&P estimates Harley’s adjusted EBITDA margin will contract 5% to 6% through 2026 and possibly through 2027, which is lower than the roughly 10% level the agency wants to see. The rating cut was not due to liquidity crunch, but margin erosion.
What “Junk” Really Means—And What It Doesn’t
Credit rating is essentially a scorecard of how reliably a company can repay its debts. Investment grade (BBB- and above) indicates low default risk; Speculative grade, or junk, indicates high uncertainty. The step from BBB- to BB+ is the smallest possible step across that range – Harley didn’t drop into CCC territory. S&P simultaneously assigned a stable outlook and noted the company has approximately $1.8 billion of cash and cash equivalents, as well as access to more than $2 billion through its commercial paper program. It is not a company on the verge of bankruptcy.
For institutional investors—pension funds, bond managers with investment-grade mandates—the downgrade matters. Some need to sell a Harley loan. This increases Harley’s borrowing costs on Wall Street. But that dynamic lives several layers above the showroom floor, and it doesn’t directly translate into worse loan terms for the person financing the Street Glide.
Harley Financial Services: The financial picture for buyers
Harley-Davidson Financial Services originates and services loans for approximately 71% of new Harley retail purchases in the US. The key structural detail here is that HDFS made a significant change in late 2025, selling approximately $6 billion in retail loan assets to investment partners KKR and PIMCO in exchange for capital and a more efficient balance sheet. Going forward, HDFS plans to sell approximately two-thirds of new retail loans to those partners, while retaining the remainder earning servicing fees. Harley executives described this new arrangement as “largely invisible” to dealers and customers.
This restructuring matters right now because it means HDFS’s ability to originate loans is not directly tied to Harley’s corporate credit rating, as it once might have been. Promotional financing – rates in the range of 0.99% to 2.99% on select new models when factory incentives are active – can still flow through dealerships. Riders with strong credit scores (720 and above) may still find credit unions beating HDFS’s standard published rates by a half point to a point and a half, as has historically been the case. That calculus hasn’t changed because of the downgrade.
Dealer Inventory and Warranty: Reasons to Watch, Not Panic
Dealer inventory is where the long-term story becomes more nuanced. The “back to bricks” plan is designed to improve dealer profitability – one of the explicit goals acknowledged by S&P – but lower margins on lower-priced models mean Harley needs higher unit volumes to compensate. If that quantity is not met, dealers may face tough allocation decisions in the future. For now, touring bikes like the Road Glide and Street Glide remain a core part of Harley’s lineup and revenue, and there’s no sign that those models are being prioritized.
The warranty is backed by the manufacturer Harley-Davidson, not by its credit rating. Downgrade does not void or weaken existing warranty terms. The relevant risk, like any manufacturer warranty, is the long-term financial health of the company itself – and with $1.8 billion of cash on hand and the S&P’s stable outlook, this is not of immediate concern. Riders purchasing today are not getting unusual warranty exposure compared to six months ago.
The big picture: a makeover under the microscope
Harley’s US registration share has declined from 49.1% in 2019 to an expected 34.5% in 2025 – a significant erosion that the “Back to BRICS” strategy is designed to reverse. The plan is a real bet: lower prices attract new riders, the new rider base grows, and a larger base ultimately supports the premium touring lineup that has always been Harley’s margin engine. S&P’s concern is that it will take years to work out the math and that margins will remain thin in the meantime.
For anyone buying a touring bike today, read honestly: Harley is in a real transition, not a freefall. The junk label is a signal to the bond markets, not a warning to stay away from the dealership. Financing remains accessible, the warranty remains intact, and the Road Glide isn’t going anywhere. What’s worth watching over the next 12 to 18 months is whether the new affordable models find takers – as that’s what will determine whether the turnaround plan sticks and, ultimately, whether Harley’s sustainability picture improves or worsens.
