News Flash Harley Borrowed Money


Harley-Davidson Funding received low-interest short-term loans for a total near $2.3 billion between October 2008 and May 2009. The money Harley borrowed was under the program outlined in the below paragraph.

Commercial paper is a critical source of funding for many businesses. In the fall of 2008, the commercial paper market was under considerable strain as money market mutual funds and other investors became increasingly reluctant to purchase commercial paper. To address these strains, the Federal Reserve established the Commercial Paper Funding Facility (CPFF) to provide liquidity to U.S. issuers of commercial paper in the event that credit was not available in the market.

Under the program, the Federal Reserve Bank of New York (FRBNY) provided three-month loans to the CPFF LLC, a specially created limited liability company (LLC) that used the funds to purchase commercial paper directly from eligible issuers. To manage its risk, the Federal Reserve required issuers whose commercial paper was purchased by the CPFF LLC to pay fees at the time of each purchase. A total of $849 million in fees were collected by the CPFF LLC. The FRBNY’s loan to the CPFF LLC was secured by all of the LLC’s assets, including its commercial paper holdings, accumulated fees, and proceeds from investments.

The last of the CPFF LLC’s commercial paper holdings matured on April 26, 2010, and the CPFF LLC was dissolved on August 30, 2010. All loans that were made to the CPFF LLC were repaid in full, in accordance with the terms of the facility, and all of the commercial paper that the CPFF LLC purchased was repaid.

Two major points that need to be pointed out:

  • A total of $849 million in fees were collected by the above program
  • All of the commercial paper that the CPFF LLC purchased was repaid.

The Federal Reserve made $849 million by loaning money to companies. So we are all upset that the Federal Reserve made some money and handed out some low interest rate loans. We are upset that Harley may have loaned you some money to purchase your new motorcycle. We are upset that Harley is still around employing people. We are upset just because.

For full information on the program and Excel spreadsheets you can download go to

Written by John Campbell, Courtesy of

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