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Investing

Warren Buffett Invests In Harley-Davidson, With 15% Rate (HOG, BRK-A)

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By Douglas A. McIntyre Updated Published
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Buffett_image_3Harley_logo_2Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) was one of the investors in Harley-Davidson Inc’s  (NYSE: HOG)  offering of $600 million of senior unsecured notes. The company is raising funds for the lending activities of Harley-Davidson Financial Services.

Davis Selected Advisers, L.P. has been a long-time investor inHarley-Davidson and is the largest holder of Harley-Davidson’s commonstock.  Davis and Berkshire Hathaway each committed to purchase equal amounts of the notes.  After looking throughBuffett’s holdings, it seems that this is a new position for Berkshire. The notes are five year notes due in 2014 with 15% annualrates. 

Harley-Davidson unveiled a three-part strategy in January to addressthe current economic environment with a focus on stimulating consumerdemand by investing in the brand, bringing down its cost structure, andsecuring additional funding for its financial services unit.

This offering was arranged by Morgan Stanley, and Citigroup, withDeutsche Bank, JPMorgan and Morgan Stanley as lead underwriters. It is under an existing shelf registration forpublic offerings of securities, including debt.

Based on the "who" is involved here, it is no shock thatHarley-Davidson shares are up.  But they are up 8% at $12.80 and havealready seen a full day’s worth of trading volume with more than 5.5million shares as of 10:39 AM EST.

Jon C. Ogg
February 3, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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