Berkshire Bond Sale …. Berkshire Hathaway is to make a bond sale to repay bridge financing for its $36bn takeover of Precision Castparts last year.

Warren Buffett’s company is set to to capitalize on strong interest in the $10bn bond sale, as orders have reached $22bn. Berkshire is making the fourth-largest bond sale of the year, and demand surged before underwriters shut up shop on Tuesday evening, according to the Financial Times.

Berkshire Bond Sale
Chart via S&P Capital IQ

berkshire Bond Sale – Berkshire Hathaway deal could grow to as much as $12bn

It is thought that Berkshire will spread the deal over 8 tranches, according to two people familiar with the transaction. The deal will include fixed and floating rate notes which will mature in 2, 3, and 5 years, alongside 7- and 10-year fixed rate paper. Advising the sale are Bank of America Merrill Lynch, Goldman Sachs, JPMorgan and Wells Fargo.

According to another source familiar with the mater, the sale could reach as much as $12bn. The deal was issued by Berkshire and one of its finance subsidiaries, and is predicted to be completed on Tuesday.

[drizzle]

In the past two weeks there have been a raft of investment grade debt sales following a previous drought due to a sharp sell of in fixed-income and equity markets. This year companies have sold $274.5bn of investment grade paper in the United States.

berkshire Bond Sale – Fewer companies making bigger debt sales this year

Interestingly the deals have been made by fewer and fewer companies, as the average deal size has increased. 186 high grade companies have made sales in U.S. debt markets, the lowest number since 1995.

The biggest debt sales of the year have been made by Anheuser Busch InBev, which sold $46bn in January, followed by Apple and Exxon Mobil. Both companies made $12bn offerings in January.

Recent filings showed that Berkshire made some major changes to its portfolio in Q4 2015. Among the most important was a new $400 million stake in Kinder Morgan (KMI), while stakes in Deere (DE) and Wells Fargo (WFC) were both increased by $321 million.

Berkshire also reduced its stake in AT&T by $450 million, as well as making a small decrease in Wabco. An $80 million stake in Chicago Bridge & Iron (CBI) was completely sold off.

[/drizzle]