Warren Buffett’s Berkshire Hathaway Inc. is preparing to issue $1.7 billion bonds to help refinance the debt that used to acquire Burlington Northern Santa Fe. The railroad company was bought by Berkshire for $26.5 billion in 2010.
According to Bloomberg, those $1.7 billion bonds are composed of $1.1 billion of five-year notes and $600 million of 10-year debentures. Those proceeds may be used to refinance another $1.7 billion of bonds that will mature in February.
Buffett’s $1.1 billion five-year notes pays 100 basis points more than similar-maturity Treasuries, and the 10-year debt offers a spread of 137.5 basis points, based on Bloomberg. The offering will be managed by Bank of America and Goldman Sachs.