¿Que hacen las grandes empresas con el miedo???
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Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) sold $2 billion of debt, leading companies taking advantage of plunging borrowing costs.
Procter & Gamble Co. (PG), the world’s largest consumer-products company, Baker Hughes Inc., WellPoint Inc. and Enterprise Products Partners LP are also among companies and government entities planning at least $7 billion of bond sales today, according to data compiled by Bloomberg.
Sales of U.S. investment-grade bonds today may reach the most since July 20 as the cost of borrowing falls to about record lows after the Federal Reserve pledged yesterday to keep interest rates near zero through mid-2013. Corporate treasurers are returning to the U.S. bond market after volatility stalled issuance for the past week, according to Timothy Cox, executive director of debt capital markets at Mizuho Securities USA Inc. in New York.
“Treasurers realize this is an opportunity to issue bonds at some of the lowest rates we’ve ever seen,” Cox said in a telephone interview yesterday.
The Fed decided to keep overnight rates at zero to 0.25 percent and said “exceptionally low levels” are likely until at least mid-2013 because economic growth was “considerably slower” than it had expected. The yield on benchmark 10-year Treasuries fell as low as 2.09 percent today, after touching an all-time low of 2.03 percent yesterday following the Fed’s statement.
Berkshire Offering
Berkshire sold $750 million of three-year floating-rate notes that pay 70 basis points more than the London interbank offered rate, Bloomberg data show. A $750 million portion of 2.2 percent five-year bonds pay 130 basis points more than similar maturity U.S. Treasuries and $500 million of 3.75 percent securities due in 2021 pay a spread of 160 basis points.
Berkshire is raising cash as its reinsurance units recover from losses on Japan’s biggest earthquake and it prepares to complete the $9 billion takeover of Lubrizol Corp. Buffett, the Omaha, Nebraska-based company’s chief executive officer, is shrugging off the Aug. 8 decision by Standard & Poor’s to place a negative outlook on the company’s credit rating.
“Buffett always takes advantage of extremes in the markets, whether to buy or to sell,” said Jeff Matthews, a Berkshire shareholder and author of “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett.” “Rates are low. They don’t get an awful lot lower than this.”
Mexico sold $1 billion of 100-year debt denominated in U.S. dollars and the University of Southern California issued $300 million of notes due in a century, Bloomberg data show.
P&G’s bond sale is split between $1 billion of five-year notes that may pay a 67 basis-point spread and $1 billion of three-year notes that may pay a 52 basis-point spread, a person familiar with that offering said, who declined to be identified because terms aren’t set.
To contact the reporters on this story: Zeke Faux in New York at zfaux@bloomberg.net; Andrew Frye in New York at afrye@bloomberg.net.
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.
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“Los dos guerreros más poderosos son paciencia y tiempo.” (León Tolstoi)