** **

**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

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**FORM 10-K**

 

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**(Markone)**
| **x** | ** ** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------|-----------------------------------------------------------------------------------------------------|

 

**Forthe fiscal year ended December 31, 2007**

 

**or**

 
| **o** | ** ** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------|---------------------------------------------------------------------------------------------------------|

 

**Forthe transition period from                    to**

 

**Commissionfile number of issuing entity: 333-124935-07**

 

**Harley-Davidson Motorcycle Trust 2007-3**

(Exact name ofissuing entity as specified in its charter)

 

**Commissionfile number of depositor:****333-124935**

 

**Harley-Davidson Customer Funding Corp.**

(Exact name ofdepositor as specified in its charter)

 

**Commissionfile number of sponsor: 333-21793**

 

**Harley-Davidson Credit Corp.**

(Exact name ofsponsor as specified in its charter)

 

| **Delaware**                                                                                           | ** ** | **51-6593332**                        |
|--------------------------------------------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization)                                        |       | (I.R.S. Employer  Identification No.) |
|                                                                                                   |       |                                  |
| **c/o  Wilmington Trust Company  Rodney Square North  1100 North Market Street  Wilmington, Delaware** |       | **19890-0001**                        |
| (Address of  principal executive offices)                                                              |       | (Zip Code)                            |

 

Issuing entity’stelephone number, including area code:**(302) 651-1000**

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:**NONE**

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:**NONE**

 

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act.

Yes  o      No  x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act.

Yes  o      No  x

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirementfor the past 90 days.

Yes  x     No  o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-Kis not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                                                                                         x

 

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, a non-accelerated filer, or a smaller reportingcompany. See the definitions of “large accelerated filer,” “accelerated filer”and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
| Large accelerated filer o |   | Accelerated filer o         |
|---------------------------|--------|-----------------------------|
|                      |   |                        |
| Non-accelerated filer x   |   | Smaller reporting company o |

(Do not check if a smaller reporting company)

 

Indicate by check markwhether the registrant is a shell company (as defined in Exchange Act Rule12b-2).

Yes  o     No  x

 
| State the aggregate  market value of the voting and non-voting common equity held by  non-affiliates computed by reference to the price at which the common equity  was last sold, or the average bid and asked price of such common equity, as  of the last business day |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| of the registrant’s  most recently completed second fiscal quarter.                                                                                                                                                                                                  | Not applicable. |
|                                                                                                                                                                                                                                                                      |   |
| Indicate the number of  shares as of the latest practicable date.                                                                                                                                                                                                         | Not applicable. |

** **

**DOCUMENTSINCORPORATED BY REFERENCE**

 

None.

 

 

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**PART I**

 

**The following Items have been omitted in accordance withGeneral Instruction J to Form 10-K:**

 

 Item 1. Business

 Item 1A. Risk Factors

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Submission of Matters to a Voteof Security Holders

 

**Item 1B. Unresolved Staff Comments**

     NotApplicable.

 

**Substitute information provided in accordance with GeneralInstruction J to Form 10-K:**

 

**Item 1112(b) of Regulation AB. SignificantObligors of Pool Assets (Financial Information).**

     NotApplicable.

 

**Item 1114(b)(2) of Regulation AB. CreditEnhancement and Other Support, Except for Certain Derivatives Instruments(Financial Information).**

     NotApplicable.

 

**Item 1115(b) of Regulation AB. CertainDerivatives Instruments (Financial Information).**

     Basedon the standards set forth in Item 1115(b) of Regulation AB, noinformation is required in response to this item.

 

**Item 1117 of Regulation AB. Legal Proceedings.**

     Thereare no legal proceedings pending, or any proceedings known to be contemplatedby governmental authorities, against the servicer, sponsor, the depositor orthe issuing entity that is material to the holders of notes. To the knowledgeof the issuing entity, there are no legal proceedings pending, or anyproceedings known to be contemplated by governmental authorities, againstWilmington Trust Company (the “Owner Trustee”) or The Bank of New York TrustCompany, N.A. (the “Indenture Trustee”) that is material to the holders ofnotes.

 

**PART II**

 

**The following Items have been omitted in accordance withGeneral Instruction J to Form 10-K:**

 

 Item 5. Market for Registrant’s CommonEquity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item 6. Selected Financial Data.

 Item 7. Management’s Discussion andAnalysis of Financial Condition and Results of Operations.

 Item 7A. Quantitative and QualitativeDisclosures About Market Risk.

 Item 8. Financial Statements andSupplementary Data.

 Item 9. Changes in and Disagreement withAccountants on Accounting and Financial Disclosure.

 Item 9A. Controls and Procedures.

 

**Item 9B. Other Information.**

     None.

 

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**PART III**

 

**The following Items have been omitted in accordance withGeneral Instruction J to Form 10-K:**

 

 Item 10. Directors and Executive Officersof the Registrant.

 Item 11. Executive Compensation.

 Item 12. Security Ownership of CertainBeneficial Owners and Management and Related Stockholder Matters.

 Item 13. Certain Relationships andRelated Transactions.

 Item 14. Principal Accountant Fees andServices.

 

**Substitute information provided in accordance with GeneralInstruction J to Form 10-K:**

 

**Item 1119 of Regulation AB. Affiliations andCertain Relationships and Related Transactions.**

     Harley-DavidsonCredit Corp. (“HDCC”), the seller, servicer and sponsor, is a Nevadacorporation and wholly-owned subsidiary of Harley-Davidson Financial Services, Inc.(“HDFS”). HDFS, a Delaware corporation, is a wholly-owned subsidiary and thefinancing division of Harley-Davidson, Inc. HDCC and its affiliatesprovide retail financial services to consumers in the United States and Canadaand wholesale financial services to Harley-Davidson® motorcycle dealers andBuell® motorcycle dealers in the United States, Canada and Europe. Harley-DavidsonCustomer Funding Corp. (“CFC”), the depositor, is a Nevada corporation andwholly-owned special-purpose finance subsidiary of HDCC.  All of theofficers and directors of CFC are also employed by HDCC or HDFS, except that atleast two directors of CFC will at all times be independent of HDCC, HDFS andHarley-Davidson, Inc.  CFC’s business is limited to, among otherthings, (i) purchasing the contracts and related property (and othersimilar retail motorcycle installment conditional sales contracts and similarpromissory note and security agreements) from HDCC (in its capacity as seller),(ii) acting as the beneficial owner of the issuing entity –Harley-Davidson Motorcycle Trust 2007-3 (the “Trust”) – and other similartrusts and (iii) performing its obligations under the transfer andservicing agreements to which it is a party (as well as similar agreementsentered into in connection with the formation of similar trusts).

 

     Annualizedlosses on HDCC’s managed retail motorcycle loans totaled 1.91% in 2007 comparedto 1.41% for the same period in 2006. Managed retail loans include loans heldby HDCC as well as those sold through securitization transactions. The 30-daydelinquency rate for managed retail motorcycle loans at December 31, 2007increased to 6.15% from 5.18% at December 31, 2006. This increase inlosses is primarily due to an increase in delinquent accounts resulting in ahigher incidence of loss as well as continued pressure on values forrepossessed motorcycles. As a result, it is expected that HDCC will experiencehigher credit losses as a percentage of managed retail motorcycle loans in 2008as compared to 2007. The assets owned by the Trust may experience credit lossesthat are the same as, greater than or less than those of managed retailmotorcycle loans as a whole. The Trust has disclosed its actual credit lossexperience for January and February 2008 in Form 10-Ds that ithas filed with the Securities and Exchange Commission.

 

**Item 1122 of Regulation AB. Compliance withApplicable Servicing Criteria.**

     Eachof HDCC and the Indenture Trustee (each, a “Servicing Participant”) has beenidentified by the issuing entity as a party participating in the servicingfunction during the reporting period with respect to the pool assets held bythe Trust. Each of the Servicing Participants has completed a report on anassessment of compliance with the servicing criteria applicable to suchServicing Participant (each, a “Report on Assessment”) during the Trust’sfiscal year ending December 31, 2007, which Reports on Assessment areattached as exhibits to this Form 10-K. In addition, each of the ServicingParticipants has provided an attestation report (each, an “Attestation Report”)by a registered independent public accounting firm regarding its related Reporton Assessment. Each Attestation Report is attached as an exhibit to this Form 10-K.Except as disclosed below, no Report on Assessment or the related Attestation Reporthas identified any material instance of noncompliance with the servicingcriteria identified in such Report on Assessment as applicable to the relatedServicing Participant.

 

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     TheBank of New York’s Report on Assessment and related Attestation Report haveidentified material noncompliance with one servicing criterion applicable toThe Bank of New York. Specifically, with regard to servicing criterion1122(d)(2)(i) (which contemplates that payments on pool assets aredeposited into the appropriate custodial bank accounts and related bankclearing accounts within the time frames specified in the transactionagreements), collections received on assets relating to certain series ofsecurities were not deposited into a segregated account for each specifiedseries but rather were deposited into a general account held by The Bank of NewYork, as indenture trustee (the “Indenture Trustee”) and remitted directly tothe investors of such series. The Bank of New York indicates that thesegregated account relating to each specified series was in existence prior tothe time deposits were to be made into such account but such account was notutilized in all instances by the Indenture Trustee as stated above.

 

     TheBank of New York further indicates in its Report on Assessment that (i) allcollections were properly allocated by the Indenture Trustee to the relatedseries of securities and timely remitted to the investors in such series, and (ii) procedureshave been in place and are currently being reinforced so that collections aredeposited into the segregated account for each specified series within theapplicable time frames and then remitted to the investors in such series inaccordance with the related transaction documents. We have not independentlyverified the accuracy of The Bank of New York’s assertions or the adequacy ofits remediation efforts; however, based on the above and information from TheBank of New York, the registrant does not believe these errors had a materialimpact or effect on the Trust’s investors.

 

**Item 1123 of Regulation AB. Servicer ComplianceStatement.**

     HDCChas been identified by the Trust as a servicer during the reporting period withrespect to the pool assets held by the Trust. HDCC has provided a ComplianceStatement, signed by an authorized officer, and such Compliance Statement isattached as an exhibit to this Form 10-K.

 

**PART IV**

 

**Item 15. Exhibits, Financial Statement Schedules.**

** **
| (a)    | List of Documents Filed  as Part of this Report       |
|--------|------------------------------------------------------------|
|   |                                                       |   |
|   | (1)                                                        | Not Applicable. |
|   |                                                       |   |
|   | (2)                                                        | Not Applicable. |
|   |                                                       |   |
|   | (3)                                                        | See Item 15(b) |
|   |                                                       |   |
| (b)    | Exhibits Required by  Item 601 of Regulation S-K |

** **
| **Exhibit   No.** | ** ** | ** **                                                                                                                                                                                                     |
|------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                    |       | Articles of Incorporation  of the Registrant, incorporated by reference to Exhibit 3.1 to  Registrant’s Registration Statement on Form S-3 (File Number 333-37550)  filed on May 22, 2000. |

 

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| 3.2  |   | Bylaws of the  Registrant, incorporated by reference to Exhibit 3.2 to Registrant’s  Registration Statement on Form S-3 (File Number 333-37550) filed on  May 22, 2000.                                                                                                                                                              |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1  |   | Trust Agreement dated  as of August 1, 2007 between Harley-Davidson Customer Funding Corp.  (“CFC”) and Wilmington Trust Company, incorporated by reference to  Exhibit 4.1 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                        |
| 4.2  |   | Indenture dated as of  August 15, 2007 between Harley-Davidson Motorcycle Trust 2007-3 (the  “Trust”) and The Bank of New York Trust Company, N.A. (the “Indenture  Trustee”), incorporated by reference to Exhibit 4.2 to Registrant’s  Form 8-K (File Number 333-124935-07),  filed on September 5, 2007. |
| 10.1 |   | Transfer and Sale  Agreement dated as of August 15, 2007 between Harley-Davidson Credit  Corp. (“HDCC”) and CFC, incorporated by reference to Exhibit 10.1 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                         |
| 10.2 |   | Sale and Servicing  Agreement dated as of August 15, 2007 among the Trust, CFC, HDCC, and  the Indenture Trustee, incorporated by reference to Exhibit 10.2 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                                  |
| 10.3 |   | Administration  Agreement dated as of August 15, 2007 among the Trust, HDCC, CFC and the  Indenture Trustee, incorporated by reference to Exhibit 10.3 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                                       |
| 10.4 |   | Underwriting Agreement  dated as of August 23, 2007 among CFC, HDCC and J.P. Morgan Securities  Inc., as representative for the several underwriters, incorporated by  reference to Exhibit 10.4 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                             |
| 10.5 |   | ISDA  Master Agreement dated as of August 30, 2007 between the Trust and  JPMorgan Chase Bank, National Association, incorporated by reference  to Exhibit 10.5 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                                              |
| 10.6 |   | Schedule  and Credit Support Annex dated as of August 30, 2007 to the ISDA Master  Agreement between the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.6 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                     |
| 10.7 |   | Confirmation  dated as of August 30, 2007 relating to the Class A-2b Notes  between the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.7 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                 |
| 10.8 |   | Confirmation  dated as of August 30, 2007 relating to the Class A-3 Notes between  the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.8 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                  |
| 31.1 |   | Rule 13a-14(a)/15d-14(a) Certification  (Section 302 Certification).                                                                                                                                                                                                                                                                      |
| 33.1 |   | Report on Assessment of  Compliance with Servicing Criteria concerning servicing activities of HDCC  for the year ended December 31, 2007.                                                                                                                                                                                                          |
| 33.2 |   | Report on Assessment of  Compliance with Servicing Criteria concerning servicing activities of The  Bank of New York Trust Company, N.A. for the year ended December 31,  2007.                                                                                                                                                                     |
| 34.1 |   | Attestation Report of  Ernst & Young LLP on Assessment of Compliance with Servicing  Criteria relating to HDCC.                                                                                                                                                                                                                                 |
| 34.2 |   | Attestation Report of  KPMG LLP on Assessment of Compliance with Servicing Criteria relating to The  Bank of New York Trust Company, N.A.                                                                                                                                                                                                                |
| 35.1 |   | Servicer Compliance  Statement of HDCC for the period from August 30, 2007 through  December 31, 2007.                                                                                                                                                                                                                                         |

** **
| (c) | Not Applicable. |
|-----|-----------------|

 

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**SIGNATURE**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned hereunto dulyauthorized.

 
|   | HARLEY-DAVIDSON  MOTORCYCLE TRUST 2007-3 |
|--------|------------------------------------------|
|   |                                     |
|   | By:                                      | Harley-Davidson Credit  Corp.,  as Servicer |
|   |                                     |   |
|   | By:                                      |   /s/ Perry  A. Glassgow |
|   |                                     |   Perry A.  Glassgow |
|   |                                     |   Vice  President, Treasurer, Acting Chief Financial Officer    and Assistant Secretary |
|        |                                          |  |  |

 

 
| March 28, 2008 |   |
|---------------------|--------|

 

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**EXHIBIT INDEX**

 
| **Exhibit** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                               |
|-------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1         |       | Articles of  Incorporation of the Registrant, incorporated by reference to  Exhibit 3.1 to Registrant’s Registration Statement on Form S-3  (File Number 333-37550) filed on May 22, 2000.                                                                                                                                           |
| 3.2         |       | Bylaws of the  Registrant, incorporated by reference to Exhibit 3.2 to Registrant’s  Registration Statement on Form S-3 (File Number 333-37550) filed on  May 22, 2000.                                                                                                                                                              |
| 4.1         |       | Trust Agreement dated  as of August 1, 2007 between Harley-Davidson Customer Funding Corp.  (“CFC”) and Wilmington Trust Company, incorporated by reference to  Exhibit 4.1 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                        |
| 4.2         |       | Indenture dated as of  August 15, 2007 between Harley-Davidson Motorcycle Trust 2007-3 (the  “Trust”) and The Bank of New York Trust Company, N.A. (the “Indenture  Trustee”), incorporated by reference to Exhibit 4.2 to Registrant’s  Form 8-K (File Number 333-124935-07),  filed on September 5, 2007. |
| 10.1        |       | Transfer and Sale  Agreement dated as of August 15, 2007 between Harley-Davidson Credit  Corp. (“HDCC”) and CFC, incorporated by reference to Exhibit 10.1 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                         |
| 10.2        |       | Sale and Servicing  Agreement dated as of August 15, 2007 among the Trust, CFC, HDCC, and  the Indenture Trustee, incorporated by reference to Exhibit 10.2 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                                  |
| 10.3        |       | Administration  Agreement dated as of August 15, 2007 among the Trust, HDCC, CFC and the  Indenture Trustee, incorporated by reference to Exhibit 10.3 to  Registrant’s Form 8-K (File Number 333-124935-07), filed on September 5, 2007.                                                                                       |
| 10.4        |       | Underwriting Agreement  dated as of August 23, 2007 among CFC, HDCC and J.P. Morgan Securities Inc.,  as representative for the several underwriters, incorporated by reference to  Exhibit 10.4 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                             |
| 10.5        |       | ISDA  Master Agreement dated as of August 30, 2007 between the Trust and  JPMorgan Chase Bank, National Association, incorporated by reference  to Exhibit 10.5 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                                              |
| 10.6        |       | Schedule  and Credit Support Annex dated as of August 30, 2007 to the ISDA Master Agreement  between the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.6 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                     |
| 10.7        |       | Confirmation  dated as of August 30, 2007 relating to the Class A-2b Notes  between the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.7 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                 |
| 10.8        |       | Confirmation  dated as of August 30, 2007 relating to the Class A-3 Notes between  the Trust and JPMorgan Chase Bank, National Association, incorporated  by reference to Exhibit 10.8 to Registrant’s Form 8-K (File Number 333-124935-07), filed on  September 5, 2007.                                                  |
| 31.1        |       | Rule 13a-14(a)/15d-14(a) Certification  (Section 302 Certification).                                                                                                                                                                                                                                                                      |
| 33.1        |       | Report on Assessment of  Compliance with Servicing Criteria concerning servicing activities of HDCC  for the year ended December 31, 2007.                                                                                                                                                                                                          |
| 33.2        |       | Report on Assessment of  Compliance with Servicing Criteria concerning servicing activities of The  Bank of New York Trust Company, N.A. for the year ended December 31,  2007.                                                                                                                                                                     |
| 34.1        |       | Attestation Report of  Ernst & Young LLP on Assessment of Compliance with Servicing Criteria  relating to HDCC.                                                                                                                                                                                                                                 |
| 34.2        |       | Attestation Report of  KPMG LLP on Assessment of Compliance with Servicing Criteria relating to The  Bank of New York Trust Company, N.A.                                                                                                                                                                                                                |
| 35.1        |       | Servicer Compliance  Statement of HDCC for the period from August 30, 2007 through December 31,  2007.                                                                                                                                                                                                                                         |

 

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