Berkshire Hathaway's Finance Unit Leads Slew of Bond Offerings; Private Placement Deal For $3.75 Billion of Notes Meets With Brisk Demand
Dow Jones Newswires</br></br>NEW YORK -- Investment-grade bond issuance sprang to life yesterday with a slew of deals, and the largest offering came from the finance unit of Berkshire Hathaway, the investment holding company controlled by billionaire Warren Buffett.</br></br>The $3.75 billion deal, offered as private placement in the Rule 144a market, was increased from an original $3 billion size and was split between three-year floating-rate notes, as well as five- and 10- year fixed-rate notes.</br></br>Although the bond deal saw strong demand, some investors expressed caution because of a recent request received by the company's reinsurance unit, General Re, from the Securities and Exchange Commission about the unit's role in "nontraditional or loss mitigation insurance products."</br></br>The SEC and New York State Attorney General Eliot Spitzer are coordinating inquiries into the possible misuse of insurance products to smooth company earnings and have sent inquiries to several insurers. Investors cited some concern that developments regarding the inquiry could cause credit spreads to widen.