Berkshire Hathaway Sells Yen Denominated Debt

Just a little fun note (or should I say sad note).

Berkshire Hathaway has sold a series of notes denominated in yen.

For a 30 year note—1.108%. Incredible!!

26 thoughts on “Berkshire Hathaway Sells Yen Denominated Debt”

  1. Picked up some DTQ today25.24 to 25.28 for the IRA callable any time at 25.00 not bad for the times we are in.

  2. Ripped from the headlines ….. this can’t end well.

    I am trying to rent a house and I’ve been asking agents how much they were going to pay me to stay there. I think I heard laughter. If it works in financial markets why not other markets?

    Name Price Change Yield
    New Zealand 5 Year Government Bond -0.391 0.9142%
    U.K. 5 Year Gilt 0.359 0.344%
    Australia 5 Year Government Bond -0.376 0.8347%
    Philippines 5 Year Government Bond -0.322 4.225%
    Hong Kong 5 Year Government Bond -0.30 1.201%
    Spain 5 Year Government Bond 0.257 -0.3272%
    Italy 5 Year Government Bond 0.188 0.2691%
    Portugal 5 Year Government Bond 0.186 -0.2964%
    Belgium 5 Year Government Bond 0.149 -0.6255%
    Germany 5 Year Government Bond 0.123 -0.8783%
    France 5 Year Government Bond 0.067 -0.7164%
    Netherlands 5 Year Government Bond 0.064 -0.7967%
    Sweden 5 Year Government Bond -0.022 -0.5962%
    U.S. 5 Year Treasury Note 0.016 1.4214%
    Japan 5 Year Government Bond 0.001 -0.3341%

    1. Bob, Distracted in part by the BBB+, I did the unthinkable today and bought the PSA-I preferred at 25.10 with a YTC at 4.8something. Some potential self-loathing was greatly ameliorated by your post which makes PSA-I look like a deal. Like “d” said today, we may in time wonder why we didn’t pick up more when we had the chance.

      1. Well, Jerry, my last non-Canadian buy was STT-C on ex date for a 5.23% yield. I felt awful about it at the time but wish now I had bought much more. $25.53 today.

        Really need to get Trump tweeting again.

        1. Bob, Have a few CNs among 44 positions and all but BAC-M and KTH are a hunker-down BBB or better with an average call date of 12/2023 not including perpetuals. So for a large part of the holdings, there’s a cliff in yield about 4 years out.

          In the interim, Camroc’s observation of continuing to buy IG issues at market may be the new TINA, but on a risk v return eval that option continues to deteriorate daily. Might have to Oliver Twist a few more of the better-priced existing holdings.

          …and long STT-C. Heck at least it’s QDI and appears we may have a few quarters left.

          1. Alpha, I checked and got roughly 25% Canadian seems to be about my limit. I had to flip out of my RPT-D today as it jumped over a couple bucks since I recently purchased. Traded it off for sister rat trap AFINP. Better yield, equally stenchy, but not a busted convertible. I will take the higher yield and 4 years call protection. If it drops back, I will reconsider and buy again.
            Im not convinced everything is going to zero. Seems when everyone is on the same side of the boat it sinks. Im still keeping everything balanced…With a lean towards higher quality, but a dash of higher yield to keep my total average yield a smidge above 6%. But I like the balance of fixed perpetuals, call protected, resets and adjustables, past call above market yield, and below par fixed issues, so I dont have to worry about yield direction too much.

          2. Jerry – my hope is that at 5.25% STT-C is just low enough that State Street won’t call it. I may be wrong but that was the thesis when I bought with 27 days call risk.

            Now, we need to stop talking it up. We’re just driving the price up!

    2. Hmm, Bob, where is your CAD 5 yr? That is what you have to watch, lol. Oddly enough it narrowed the gap to about 10 bps the past few days. Mountie Fed seems a little resistant to lower rates without more evidence of need.

      1. Grid – the BOC 5-year has been on a tear last week or so. That’s at least partly responsible for the uptick in prices but I’m feeling it also has to do with the broader confidence in the financial markets that we see in the U.S.

        I don’t think the storm has passed. I’m planning on more trauma in the markets. I have a dozen or so buys in on various Canadians but except for one I’m well under the bid, much less the ask.

        So, I will sit on my hands, and wait.

        Surely, either Trump or Mr. Dress-up (that’s how they refer to Justin), will do something to tank the markets.

        Anyone for pea meal bacon?

  3. It is part of the plan: PRIVATIZATION of everything, this 40 year thrust lower makes its execution follow a very careful plan. It has been purposeful. Why haven’t we had the washout bankruptcies? Who got saved? What did you previously consume and live by that is not now provided and channeled through a very few brokers with complete legal protections? Where’s middle America? Where’s a third or fourth party? Where’s the vote of No Confidence? Where’s a multi-party consensus government? You can’t even grow your own food most neighborhoods!! Not being paranoid rather an observer of facts. Sorry Tim probably a misplaced reply.

    1. I think you are right to be concerned, Joel.

      There is a massive, global squeeze on rates and the scramble is on. Someone, for example, is bidding $15/sh more for a qdi noncallable, IG preferred I bought just a week or so ago. I ain’t selling.

      The busted converts bounce around, sinking quite a bit during a few days of optimism, now headed back up again.

      The only quasi-bargain I see in those of interest to me now is SLMNP, being offered @ 1040. If I didn’t already own so much of it…

      It IS scary, but many who opt for putting a lot into MMKTs may be trapped in them. So I don’t. I just suck it up and lower my expectations for the IG noncallable QDIs. Even in the low to mid 4s, they are scarce. But if I can buy some, I will hold. They could be golden in a year or so…

      “It is what it is.” –T. Duncan

      JMO

      1. camroc, I own SLMNP as well. Do you feel it is still a good bargain, and please educate me on the possibility of a call – is it a busted convertible, or whatever? I have forgotten the DD I used to do, and figure you are so much more on top of things, the info will just come rolling off your keyboard, lol.

        If I cannot find anything worthwhile, I may just have to go buy more WFC-L & BAC-L.

        Thanks!

        1. Inspy, you need more coffee! You remember, I know you do…..This is a noncallable preferred because LYB bought out pitiful A. Schulman. LYB has BBB+ senior unsecured, so this basically makes SLMNP BBB- as LYB is responsible for payment. This is the infamous issue that exposed my math and reading comprehension skills. I thought there was an owner put at $1000 par anytime. But through some good research of others they found out the owner put option is more like $802…But hey, that is better than 99% of all other preferreds as their put option is….well I guess $0 since they dont have one, lol.
          Just remember before you cash in all your Tbills for this BBB- issue…..I know its investment grade, but its a chemical company and cyclical in nature. So it doesnt carry the weight to me that maybe it actually is. I got my little stash of them for a long term hold myself though.

        2. A note of caution here. If I understand the terms of BAC-L correctly: Let’s say the price of the common BAC should go to $65….hey., it could happen! BAC could then force conversion of the preferred L, and the holder would receive $1300 worth of common for each share….and each share is now trading well above that price.

      2. I here ya, Camroc. My NYCB-U went to $50 today up several bucks from purchase a few months ago. I could have sold at that price but let the chance go. Dont really have a suitable option to replace with. I probably could have got back in lower, but that 6% of decent quality is hard to come by. So hold I will…

      1. Tim, this entire week has been fairly ho hum and am glad Friday is here. I hope last night is not indicative of the NFL season this year as it was a real snoozer.

  4. Yes and this is what I mean about companies taking on debt they don’t need need to. Scares the daylights out of me. They recently started doing common shares buybacks also. Historically, Buffet never did them.

    So, you borrow money and buyback stock to make earnings per share look better. I hate it. This is not EPS growth. I truly hate share buyback because it distorts things.

    .

    1. Great point steve. But everything about our system rewards this behavior. We give corporations tax relief they don’t even need, and buybacks are how they spend the money.

      1. It’s like a double whammy, tax relief has undeniably caused more govt debt and then when companies borrow to buy back stock it adds to corporate debt.

        1. It seems to me that the debt-issuance/share-buyback shell game will be the next crisis. Just not sure which component fails first.

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