21 03 2016

Berkshire Hathaway's $12 Billion Notes Offering

Simpson Thacher represented BofA Merrill Lynch, Goldman, Sachs & Co., J.P. Morgan and Wells Fargo Securities in the registered public offerings by Berkshire Hathaway Inc. (“Berkshire”) and Berkshire Hathaway Finance Corporation (“BHFC”) of $12 billion aggregate principal amount of notes over ten tranches with maturities ranging from 2 to 12 years. The transaction included offerings by Berkshire of $5.5 billion in U.S. dollar-denominated notes and €2.75 billion ($3.05 billion) in euro-denominated notes, as well as BHFC’s offering of $3.5 billion in both fixed and floating rate notes which will be guaranteed by Berkshire.


All transactions closed on March 15, 2016. Berkshire’s euro-denominated notes will be listed on the New York Stock Exchange.

Berkshire used the net proceeds from its offerings to repay a $10 billion bank loan it obtained to finance a portion of its acquisition of Precision Castparts Corp. (“PCC”) and to refinance $300 million aggregate principal amount of its 2.2% Senior Notes due 2016 that matured and was repaid on February 11, 2016.  BHFC used the net proceeds from its offering to replace $500 million aggregate principal amount of its 2.45% Senior Notes due 2015 that matured and was repaid on December 15, 2015, to make term loans to Berkshire subsidiaries Vanderbilt and 21st Mortgage, and to provide financing for certain businesses of The Marmon Group, a Berkshire subsidiary.  Berkshire’s acquisition of PCC, a transaction valued at $37.2 billion including the assumption of outstanding PCC net debt, is one of Berkshire’s largest acquisitions to date. PCC is a worldwide diversified manufacturer of complex metal components and products serving the aerospace, power and general industrial markets.   Berkshire and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services. Berkshire’s common stock is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.  

The Simpson Thacher team for the transaction included Andy Keller (Picture), Ryan Castillo and Todd Noelle (Capital Markets); Steve DeLott (Insurance); Jonathan Cantor, Jacqueline Clinton and Taylor Alexander (Tax); and Jennie Getsin (FINRA and Blue Sky). Involved fees earner: Andrew Keller - Simpson Thacher & Bartlett; Ryan Castillo - Simpson Thacher & Bartlett; Todd Noelle - Simpson Thacher & Bartlett; Steven DeLott - Simpson Thacher & Bartlett; Jonathan Cantor - Simpson Thacher & Bartlett; Jacqueline Clinton - Simpson Thacher & Bartlett; Taylor Alexander - Simpson Thacher & Bartlett; Jennie Getsin - Simpson Thacher & Bartlett;

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