FREE Newsletter
Sign up below to receive our free LIBOR newsletter.
Recommended Links
 |
Berkshire Hathaway Issues LIBOR-Based Notes |
February 5, 2010
According to The Wall Street Journal, Berkshire Hathaway, Warren Buffet’s investment holding company, has issued notes with rates based on LIBOR, the London Interbank Offered Rate. LIBOR is a filtered average of rates that banks charge each other for unsecured, short-term loans.
Berkshire Hathaway’s total offering of $8 billion will finance its takeover of Burlington Northern Santa Fe Corp, with yields for certain components based on LIBOR and others based on Treasuries. The LIBOR-based components are:
- $1.1 billion in two-year floating-rate notes, at LIBOR plus 18 basis points
- $1.2 billion of three-year floating-rate notes, at LIBOR plus 45 basis points
The Wall Street Journal notes that the appeal of the offering is based on the bonds’ short-term maturity (in anticipation of possible rate hikes) and the presence of Warren Buffet himself.