8-KOther EventsExhibits & Filings

BERKSHIRE HATHAWAY INC 8-K Report, Corporate Update (Jan 12, 2017)

Filed January 12, 2017For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. (BRK-B) filed a Form 8-K on January 12, 2017, to report on the issuance of debt by its subsidiary, Berkshire Hathaway Finance Corporation (BHFC). BHFC issued a total of $1.3 billion in Floating Rate Senior Notes, split into two tranches: $950 million due January 2019 and $350 million due 2020. These notes are fully and unconditionally guaranteed by Berkshire Hathaway Inc. This issuance was conducted under a previously filed registration statement and involved a syndicate of well-known underwriters, including Goldman Sachs, J.P. Morgan, Merrill Lynch, and Wells Fargo. The issuance of these notes represents a strategic move to raise capital, likely to support Berkshire Hathaway's ongoing operations, investment activities, or potential acquisitions. Investors should note the floating rate nature of these notes, meaning their interest payments will adjust with prevailing market rates.

Key Highlights

  • 1Berkshire Hathaway Finance Corporation (BHFC) issued $1.3 billion in Floating Rate Senior Notes.
  • 2The issuance comprises two tranches: $950 million due January 2019 and $350 million due January 2020.
  • 3Berkshire Hathaway Inc. provides a full and unconditional guarantee for all issued notes.
  • 4The notes were issued under a registration statement previously filed with the SEC.
  • 5A syndicate of prominent financial institutions acted as underwriters for the offering.
  • 6The interest rate on the notes is variable (floating rate), tied to market interest rates.

Frequently Asked Questions

This 8-K filing reports on the debt issuance by Berkshire Hathaway Finance Corporation (BHFC), a subsidiary of Berkshire Hathaway Inc. Specifically, it details the issuance of $1.3 billion in Floating Rate Senior Notes.

A total of $1.3 billion in notes were issued. This includes $950 million in Floating Rate Senior Notes due January 2019 and $350 million in Floating Rate Senior Notes due January 2020.

The full and unconditional guarantee from Berkshire Hathaway Inc. means that Berkshire Hathaway Inc. is directly responsible for the repayment of these notes, significantly reducing the credit risk for investors. It effectively means investors are lending directly to Berkshire Hathaway Inc.

'Floating Rate' means the interest paid on these notes will fluctuate over time, based on a benchmark interest rate (e.g., LIBOR or SOFR). 'Senior Notes' indicates their priority in the capital structure; in case of bankruptcy or liquidation, these bondholders would be paid before subordinated debt holders but after secured debt holders.