8-KFinancial EventsExhibits & Filings

BERKSHIRE HATHAWAY INC 8-K Report, Financial Obligation (Jan 13, 2005)

Filed January 13, 2005For Securities:BRK-BBRK-A

Summary

This 8-K filing from Berkshire Hathaway Inc. (BRK-B), filed on January 13, 2005, primarily reports on the issuance of a substantial amount of debt by its wholly-owned subsidiary, Berkshire Hathaway Finance Corporation (BHFC). BHFC issued a total of $3.75 billion in senior notes across three tranches: $1.5 billion in 4.125% Senior Notes due 2010, $1 billion in 4.85% Senior Notes due 2015, and $1.25 billion in Floating Rate Senior Notes due 2008. These notes were offered to qualified institutional buyers and non-U.S. persons, with Berkshire Hathaway Inc. providing an unconditional guarantee for all of BHFC's obligations. The issuance of these notes signifies a strategic move to raise significant capital, likely for ongoing investments, acquisitions, or general corporate purposes, leveraging Berkshire's strong credit standing. Investors should note the terms of these notes, including their interest rates, maturity dates, and the registration rights agreement, which obligates Berkshire to either offer an exchange for registered notes or register resales of the issued notes. This transaction increases the company's leverage but is backed by the robust creditworthiness of Berkshire Hathaway.

Key Highlights

  • 1Berkshire Hathaway Finance Corporation (BHFC), a subsidiary of Berkshire Hathaway Inc., issued $3.75 billion in senior notes.
  • 2The issuance consists of three tranches: $1.5 billion (4.125% due 2010), $1 billion (4.85% due 2015), and $1.25 billion (Floating Rate due 2008).
  • 3Berkshire Hathaway Inc. provided an unconditional guarantee for all obligations under these notes.
  • 4The notes were sold to qualified institutional buyers in the U.S. and non-U.S. persons outside the U.S., utilizing Rule 144A and Regulation S.
  • 5An Exchange and Registration Rights Agreement was entered into, obligating BHFC and Berkshire to facilitate the registration of these notes or an exchange for registered notes.
  • 6The floating rate notes will reset quarterly based on LIBOR plus a 0.05% spread.
  • 7The filing falls under Item 2.03, reporting the creation of a direct financial obligation.

Frequently Asked Questions

Berkshire Hathaway Finance Corporation issued a total of $3.75 billion in senior notes, comprising $1.5 billion in 4.125% Senior Notes due 2010, $1 billion in 4.85% Senior Notes due 2015, and $1.25 billion in Floating Rate Senior Notes due 2008.

Yes, Berkshire Hathaway Inc. has provided an unconditional and irrevocable guarantee for all of BHFC's obligations under these notes, meaning Berkshire Hathaway Inc. is directly liable if BHFC defaults.

The 4.125% Senior Notes due 2010 mature on January 15, 2010. The 4.85% Senior Notes due 2015 mature on January 15, 2015. The Floating Rate Senior Notes due 2008 mature on January 11, 2008, and their interest rate will be reset quarterly at LIBOR plus 0.05%.

The Exchange and Registration Rights Agreement ensures that the holders of these notes will eventually be able to hold registered securities. BHFC and Berkshire have agreed to file a registration statement to either offer to exchange these notes for substantially similar registered notes or, in certain cases, register the resale of these notes.