Finance History | Harley-Davidson — Berkshire Buys 15% Debt

At Harley-Davidson's 3700 West Juneau Avenue headquarters in Milwaukee, a celebrated consumer brand turned to exceptionally expensive capital on February 3, 2009, pricing US$600 million of senior unsecured notes during the global credit crisis. Berkshire Hathaway and long-time shareholder Davis Selected Advisers agreed to purchase equal portions, giving Berkshire US$300 million of notes due in 2014 and paying 15% interest per year. For Berkshire's half alone, the stated coupon translated into US$45 million of annual interest if the debt remained outstanding for a full year, a return that revealed how severely normal credit channels had tightened even for a company with an internationally recognized brand. Harley-Davidson said the proceeds would support the ongoing motorcycle-lending activities of Harley-Davidson Financial Services, so the financing addressed more than factory operations: without dependable funding for dealers and customers, the company's ability to sell expensive motorcycles could weaken even if enthusiasm for the products endured. The SEC filing recorded the notes as senior unsecured obligations callable only through a make-whole redemption feature, which placed Berkshire ahead of equity without giving it a security interest in specific motorcycles, receivables, or buildings. That structure differed from Berkshire's 2008 preferred-stock investments in Goldman Sachs and General Electric because Harley paid a fixed debt coupon without an attached equity warrant, making the transaction a concentrated credit judgment about liquidity, brand durability, and repayment capacity rather than a route to ownership. The deal illustrates Buffett's crisis-era advantage in practical terms: Berkshire could commit cash quickly when confidence was scarce, while the borrower accepted a high contractual cost to secure funding and the reputational signal of Berkshire's participation. The cover photograph shows Harley-Davidson's historic Juneau Avenue offices and factory complex, not the 2009 note signing; Wikimedia contributor Freekee photographed the listed building in 2010 and released the image into the public domain.