Harley Davidson 2015 Annual Report Download - page 43

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43
Medium-Term Notes – The Company has the following medium-term notes (collectively, the Notes) issued and
outstanding at December 31, 2015 (in thousands):
Principal Amount Rate Issue Date Maturity Date
$450,000 3.875% March 2011 March 2016
$400,000 2.70% January 2012 March 2017
$400,000 1.55% November 2014 November 2017
$878,708 6.80% May 2008 June 2018
$600,000 2.40% September 2014 September 2019
$600,000 2.15% February 2015 February 2020
The Notes provide for semi-annual interest payments and principal due at maturity. Unamortized discounts on the Notes
reduced the balance by $3.6 million, $3.6 million, and $1.5 million at December 31, 2015, 2014 and 2013, respectively.
In February 2015, the Company issued $600.0 million of medium-term notes that mature in 2020 and have an annual
interest rate of 2.15%. In September 2014, the Company issued $600.0 million of medium-term notes that mature in September
2019 and have an annual interest rate of 2.40%. In November 2014, the Company issued $400.0 million of medium-term notes
which mature in November 2017 and have an annual interest rate of 1.55%.
During 2015, 2014 and 2013, the Company repurchased an aggregate $9.3 million, $22.6 million, and $23.0 million,
respectively, of its 6.80% medium-term notes which mature in June 2018. As a result, the Company recognized in financial
services interest expense $1.1 million, $3.9 million and $4.9 million, respectively, for losses on the extinguishment of debt,
which included unamortized discounts and fees. During September 2015, $600.0 million of 1.15% medium-term notes matured,
and the principal and accrued interest were paid in full. During December 2014, $500.0 million of 5.75% medium-term notes
matured, and the principal and accrued interest were paid in full.
In January 2016, HDFS issued $600.0 million of medium-term notes that mature in January 2019 and have an annual
interest rate of 2.25% and $600.0 million of medium term notes that mature in January 2021 and have an annual interest rate of
2.85%.
Senior Unsecured Notes – In July 2015, the Company issued $750.0 million of senior unsecured notes in an underwritten
offering. The senior unsecured notes provide for semi-annual interest payments and principal due at maturity. $450.0 million of
the senior unsecured notes mature in July 2025 and have an interest rate of 3.50%, and $300.0 million of the senior unsecured
notes mature in July 2045 and have an interest rate of 4.625%. The Company used the proceeds from the debt to repurchase
shares of its common stock in 2015.
In February 2009, the Company issued $600.0 million of senior unsecured notes in an underwritten offering. The senior
unsecured notes provide for semi-annual interest payments and principal due at maturity. During the fourth quarter of 2010, the
Company repurchased $297.0 million of the $600.0 million senior unsecured notes at a price of $380.8 million. The senior
unsecured notes matured in February 2014 and the Company repaid the remaining senior unsecured notes outstanding.
Asset-Backed Canadian Commercial Paper Conduit Facility – The Company has a revolving facility agreement
(Canadian Conduit) with a Canadian bank-sponsored asset-backed commercial paper conduit. Under the agreement, the
Canadian Conduit is contractually committed, at the Company's option, to purchase from the Company eligible Canadian retail
motorcycle finance receivables for proceeds up to C$240 million. The transferred assets are restricted as collateral for the
payment of the debt. The terms for this facility provide for interest on the outstanding principal based on prevailing market
interest rates plus a specified margin. The Canadian Conduit also provides for a program fee and an unused commitment fee
based on the unused portion of the total aggregate commitment of C$240 million. There is no amortization schedule; however,
the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal.
Upon expiration of the Canadian Conduit, any outstanding principal will continue to be reduced monthly through available
collections. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, as of December 31,
2015, the Canadian Conduit has an expiration date of June 30, 2016. The contractual maturity of the debt is approximately 5
years.
During 2015 and 2014, the Company transferred $100.0 million and $97.1 million, respectively, of Canadian retail
motorcycle finance receivables to the Canadian Conduit for proceeds of $87.5 million and $85.0 million, respectively.