Warren Buffett, the celebrated investor, is backing one of America’s most iconic companies, buying a $300m (£207m) debt tranche in motorbike manufacturer Harley-Davidson.
Warren Buffett injects $300m into Harley Davidson
Mr Buffett, better known for his investments in insurance and financials, bought the debt as part of a $600m issue by Harley to increase its cash position.
Harley has been struggling of late, following a 58pc decline in its fourth-quarter profit after losses at its financing arm, announcing the loss of 1,100 jobs last month and the need to consolidate a number of its plants.
The new cash will be used to bolster its finance arm, with RBC Capital Markets’ Ed Aaron noting: “Harley’s finance arm needs capital in a highly constrained credit environment.”
But that capital will come at a cost – with Mr Buffett receiving a 15pc annual dividend on his investment in Harley’s senior unsecured debt, which matures in 2014.