Warren Buffett’s Berkshire Hathaway Takes on $250M Tiffany & Co Debt

By Hercules Kataveli, B2P
Published on Saturday February 14, 2009 at 1:44 pm ET
Updated 08-23-10, 2:33 pm ET

Billionaire investor Warren Buffett’s Berkshire Hathaway has just purchased $125 million of eight-year bond notes and an additional $125 million in ten-year bond notes from luxury jewelry maker Tiffany & CO., meaning Berkshire Hathaway has effectively taken on $250 million of debt from the company. Both bonds are structured to yield Berkshire 10% According to Merrill Lynch, the average U.S. bond yielded 7.37% in 2008/ Tiffany & Co. says the new proceeds will be used to fund continuing operations and to refinance current debt.

 This is one of many massive investments Berkshire has made, making it easier for struggling companies to gain access to more affordable and much needed capital. Berkshire Hathaway recently purchased $5 billion worth of preferred shares in investment bank Goldman Sachs, $3 billion of preferred stock in General Electric, and more recently, $750 million in the struggling motorcycle maker Harley Davidson, which announced 1,100 layoffs on Jan 24, 2009 after having Q4 profits down 58% to $77.8 million.

According to Wikipedia, Warren Buffett’s 2008 net worth was US $62 billion.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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