Buffett’s Berkshire Hathaway in $1.5B debt sale

By Reuters
Posted Jan. 3 at 3:37 p.m.

Billionaire investor Warren Buffett’s Berkshire Hathaway opened 2011 with a $1.5 billion debt sale on Monday, tapping markets as it customarily does early in the year to refinance maturing notes.

Thomson Reuters IFR reported Berkshire Hathaway Finance came to market with $375 million in three-year floating rate notes priced at three-month LIBOR plus 33 basis points.

It also offered $375 million in 1.5 percent three-year fixed-rate notes at 58 basis points over comparable Treasuries and $750 million in 10-year 4.25 percent fixed-rate notes at 95 basis points over Treasuries.

The notes will be used to retire existing floating rate notes due to mature this year, IFR said.

“I see nothing unusual,” one investor told IFR, adding Berkshire had locked in a good rate on the 10-year paper and had largely gone “by the book” with the sale.

It was one of the largest floating-rate issues by a high-grade issuer since International Business Machines Corp sold $1 billion in 18-month floating-rate paper on December 13.

Last January, Buffett’s financing vehicle Berkshire Hathaway Finance came to market with a $1 billion sale, which like Monday’s offer was also split into 25 percent floating-rate notes and 75 percent fixed notes.

The firm also issued a mix of fixed and floating notes in January 2008 and January 2005 as well.

Buffett, who was sitting on a $34.5 billion cash pile as of September 30, has run Berkshire since 1965. The firm owns about 80 businesses and a stock portfolio in the tens of billions of dollars.

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