... Financial Services, Inc.'s (HDFS) ratings are linked to those of its parent, Harley Davidson, Inc. (HOG), as Fitch believes HDFS is a core subsidiary of HOG. This is evidenced by HDFS's close operating relationship and support agreement with HOG, whereby, if required, HOG agrees to provide HDFS with financial support to maintain HDFS's fixed-charge coverage at 1.25x and minimum net worth of $40m. Solid Operating Performance: HDFS's operating performance since 2009 has benefited from overall decreased loan loss provisioning and improved net interest income. HDFS reported operating income of $64.7m in 1Q15, up modestly from $63.2m in 1Q14, primarily due to higher interest income from a larger portfolio, partially offset by an increase in provisioning. Fitch expects marginally weaker operating performance in 2015 due to margin compression driven by increased competition, rising interest rates and normalizing credit losses. Stable but Normalizing...
