OREANDA-NEWS. Fitch Ratings has affirmed the Long-term Issuer Default Rating (IDR) of Harley-Davidson Financial Services, Inc. (HDFS) at 'A'. In addition, Fitch has affirmed the senior unsecured ratings of HDFS and Harley-Davidson Funding Corp. (HDFC) at 'A' and HDFS's short-term IDR and commercial paper ratings at 'F1'. The Rating Outlook remains Stable.

The rating action follows Fitch's affirmation earlier today of the ratings assigned to HDFS' parent company, Harley-Davidson, Inc. (HOG) at the same rating levels.

A full list of rating actions follows at the end of this release. For more information on HOG, please see 'Fitch Affirms 30 U.S. Industrials & Transportation Companies' Ratings', dated April 23, 2015.

KEY RATING DRIVERS
The rating affirmation of HDFS and its subsidiary HDFC reflects HDFS' close operating relationship and support agreement with HOG, whereby, if required, the company agrees to provide HDFS with financial support in order to maintain HDFS's fixed charge coverage at 1.25x and minimum net worth of \$40 million. The ratings of HDFS and HOG are linked, as Fitch believes that the finance company is a core subsidiary of the parent as demonstrated by the explicit and implicit level of support between the two entities.

The ratings also reflect HDFS' solid operating performance, stable but normalizing asset quality, strong liquidity and modestly increased leverage profile, which is consistent with similarly rated captive finance peers but higher than many stand-alone finance companies.

RATING SENSITIVITIES
HDFS' IDR and Rating Outlook are linked to HOG and therefore would change with any change in HOG's ratings. However, negative rating action could be driven by a change in the perceived relationship between HDFS and its parent. Additionally, a change in profitability leading to operating losses, meaningful deterioration in asset quality, material increase in leverage, difficulty accessing long-term funding, and/or a significant reliance on secured debt or other short-term funding sources could also yield negative rating action.

Fitch has affirmed the following ratings:

HDFS
--Long-term IDR at 'A';
--Senior unsecured debt at 'A';
--Short-term IDR at 'F1';
--Commercial paper rating at 'F1';

HDFC
--Senior unsecured rating at 'A'.

The Rating Outlook is Stable.