Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), the conglomerate controlled by billionaire investor Warren Buffett, disclosed its intention to redeem notes of USG Corporation (NYSE:USG) convertible to shares of common stock in its schedule 13D/A filing with the Securities and Exchange Commission (SEC) dated March 25.

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USG Corporation (NYSE:USG) issued a notice that the redemption of its Notes will be on April 17, 2014.  According to Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), the notes scheduled for redemption are subject to a stated redemption price equal to 105% of the aggregate principal amount of the notes plus accrued and unpaid interest excluding the redemption date unless holders of such notes convert it prior to the date of redemption.

Berkshire Hathaway converts notes for $11.45 a share

Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) said the notes of USG Corporation (NYSE:USG) scheduled for redemption are convertible into 87.7193 shares of its common stock per $1,000 principal amount of the notes ($11.40 per share).

The conglomerate said its subsidiaries, BH Nebraska, BH Assurance, and General Re Life will redeem the notes prior to the redemption date set by USG Corporation (NYSE:USG). According to Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), the combined amount of notes held by its subsidiaries that are converted USG common stock is $56,170,000.

Following the redemption of the notes, the stake of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) in USG Corporation (NYSE:USG) will increase by 4,927,193 shares.  The conglomerate held 38,890,174 shares of USG based on its latest 13F filing.

Buffett confident in housing market

Market observers believe that Buffett’s bullish investment in USG Corporation (NYSE:USG) shows his confidence in the U.S. housing market. USG is a manufacturer of gypsum board, which is largely used in the construction of housing and commercial units.

The National Association of Home Builders reported that the number of building permits issued for the construction of single-family and multi-family homes increased by 20% across the United States. The data only shows that the housing market in the country is growing.

The financial performance of USG Corporation (NYSE:USG) in the fourth quarter indicated that it is benefiting from the improvement in the housing industry. The company’s sales increased Sales increased 12 percent to $915 million and its U.S. gypsum wallboard shipments rose to a total of 1.38 BSF from 1.22 BSF in the year ago quarter.