(Australian Associated Press)
Iconic motorcycle brand Harley Davidson is rolling through Australia to test local enthusiasm for its first-ever debt issue outside the United Sates.
The maker of America’s best-known two-wheeled transport sees the Australian debt market as the smoothest road to growing its investor base in the Asia Pacific Region.
Harley Davidson will meet with asset managers in Sydney, Melbourne and Singapore on March 27 to gauge appetite for a limited corporate bond issue.
JP Morgan executive director Craig Dreyer, who is arranging the meetings, says the motorcycle manufacturer has 276 dealerships in 17 countries in the Asia-Pacific region.
“Harley certainly have a view to expand their investor base in both the debt and equity sides of the business in the region,” Mr Dreyer told AAP.
“Asia is going to be a more important debt market next year and in five years time, so gaining a greater degree of exposure to investors here will help internationalise their investor base.”
Mr Dreyer said Harley Davidson, which is rated A3 by Moody’s and A minus stable by Standard and Poor’s, has never issued corporate bonds outside the US, where long-term low interested rates have created optimum conditions in debt markets.
However, he said, Australia was a “particularly compelling” market for the motorcycle company because it offered transaction diversification and comparable economic returns to the US dollar market.
Mr Dreyer also said local investors are keen to purchase debt from large international issuers, who rarely issue in Australia because credit markets are more attractive in the US and Europe.
Mr Dreyer said Australian investors understood Harley Davidson’s business and products and the financial risk levels, and the company had a sound rating but was not too well rated.
“Harley ticks a lot of boxes; so far the investor interest in the meetings we’ve set up has been very high,” he said.