According to Bloomberg, Berkshire Hathaway Inc., the investment and holding company run by Warren Buffett sold $750 million of three-year, 4 percent notes.
Bloomber data showed that the company issued the debt, which priced to yield 282 basis points more than similar-maturity Treasuries. A basis point is 0.01 percentage point.
Standard & Poor’s is reviewing the firm’s credit rating for a possible downgrade. The debt is rated Aaa by Moody’s Investors Service and AAA by S&P, their top rankings as shown by Bloomberg.
The sales’ net proceeds will go to Vanderbilt Mortgage & Finance Inc, which is a unit of Berkshire’s Clayton Homes Inc. Clayton Homes Inc. makes manufactured housing and provides loans to buyers of homes sold by Clayton.
Warren Buffett included in his annual letter that companies without government backing, such as Berkshire, are facing higher borrowing costs.
Berkshire may lose its top-level AAA rating because values have fallen in its equity portfolio and capital has shrunk as stated by the S&P.
There is “absolutely nothing out of the ordinary,”about today’s offering, John Iten, S&P’s director in the North American insurance group, said today in a telephone interview.
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