S&P Global Ratings downgraded Harley-Davidson Inc.'s credit ratings to junk status, a move that signals increased risk for the iconic motorcycle manufacturer. The downgrade stems directly from the company's strategic shift to introduce lower-cost motorcycles in an effort to revitalize declining revenues.

This decision by S&P suggests investors now perceive a higher probability of default on Harley-Davidson's debt. The junk rating will likely increase the cost of borrowing for the company, potentially impacting its ability to fund operations and new product development. It also makes the stock less attractive to institutional investors who have mandates to hold investment-grade debt.

The strategy itself, aimed at broadening the customer base with cheaper models, appears to be the primary driver behind the credit agency's concern. Investors and creditors will be closely watching sales figures for these new models to determine if the plan can effectively boost revenue without further eroding brand value or financial stability.