Warren Buffett’s railroad Burlington Northern Santa Fe, which was recently bought by Berkshire Hathaway in year 2010, just sold $1.25 billion worth of bonds for the purposes of general corporate needs.
The bonds that Burlington Northern issued were split up into different parts. The first set of bonds, which went for the amount of $600 million, were at 3.05%, and they were 10 year securities which yielded 125 basis points more than other ponds that are similar. The second type of bonds were for $650 million and they were 4.375%, 30 year bonds and the basis points were 150 more than current benchmarks. This was gathered according to data presented by Bloomberg. Moody’s Investors Service is going to rate these bonds as A3, which is the fourth lowest investment grade that they have. Standard & Poor’s is going to be rating these bonds BBB+ which is even one level lower than the Moody’s rating. This is also according to information that was gathered by Bloomberg.
Burlington Northern has not sold any bonds since February. At the current time, the $625 million bonds they have at 4.4% that are due in 2042 in the month of March, are trading at 101.3 cents on the dollar, and a yield 4.32% as of yesterday. This information is presented by the company name Trace, which is a reporting system for bond prices of the Financial Industry Regulatory Authority.
Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. are the companies that managed the sale for Burlington Northern Santa Fe, which is a company based out of Fort Worth, Texas. The basis point is 0.01 percentage point.