Warren Buffett’s firm, Berkshire Hathaway, is paying more for debt than its fellow competitors. Mortgage lenders Fannie Mae (FNM) and Freddie Mac (FRE) have lower costs.
Fannie Mae and Freddie Mac are the mortgage lenders that lost a combined amount of $108.8 billion in 2008. Bank of America Corp (BAC) is also paying a lower interest on notes under a program in which the U.S. agrees to guarantee debt.
Berkshire Hathaway has not had a bad previous year in comparison to practically bankrupt competitors. However, Berkshire is to pay 4 percent to bondholders who bought $750 million of the firm’s AAA-rated debt last week.
Berkshire’s competitors, in the other hand, were able to find buyers for notes paying 2.375 percent or less. The Government has aided falling companies in need of multiple helpings of U.S. rescue funds.
For now, various financials may report “profits” but in the long run those companies who have been falling may indeed continue to do so in the future.
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