09:16 AM EDT, 07/30/2025 (MT Newswires) -- Harley-Davidson ( HOG ) said Wednesday its Harley-Davidson Financial Services unit has formed a long-term partnership with KKR (KKR) and investment management firm PIMCO.

Under the deal, Harley-Davidson Financial Services will sell a 4.9% equity interest to each partner, the company said. The financial services unit will also sell retail loan receivables exceeding $5 billion at a premium and continue to originate and service loans, Harley-Davidson ( HOG ) said.

The company said it expects the deal to provide about $1.25 billion in discretionary cash.

Harley-Davidson ( HOG ) said it plans to use the proceeds to reduce $450 million of debt, return around $500 million to shareholders, and fund growth investments. KKR and PIMCO have also agreed to buy about two-thirds of the new retail loans generated by HDFS annually for at least five years, the company said.

Shares of Harley-Davidson ( HOG ) were up more than 17% in recent Wednesday premarket activity, while KKR shares were edging 0.6% higher.