TEXT-S&P: Berkshire Hathaway Finance notes rating is unchanged

Wed Jan 9, 2013 12:16pm EST

Jan 9 - Standard & Poor's Ratings Services said today that its 'AA+' senior
debt rating on Berkshire Hathaway Finance Corp.'s (BHFC) $2.85 billion senior
notes remains unchanged following the company's announcement that it has
increased the size of the issue to $2.85 billion from $2.35 billion. This series
of notes were originally issued in an amount of $1.6 billion on May 15, 2012,
then increased through a $750 million add-on offering on Sept. 15, 2012. The
current notes are a second expansion of this series and have identical terms:
$1.350 billion (from $1.075 billion) 1.6% senior notes due 2017; $775 million
($550 million) 3.0% senior notes due 2022; and a third tranche, comprising $725
million 4.4% senior notes due 2042, that is not affected by the current issue.
The company will use the proceeds of this issue to repay $500 million of 4.5%
senior notes maturing on Jan. 15, 2013.

We base our issue rating on the notes on our ratings on Berkshire Hathaway 
Inc. (BRK; AA+/Negative/A-1+), BHFC's ultimate parent, reflecting BRK's
extremely strong competitive position, very strong earnings, very strong 
liquidity position, and conservative financial leverage and coverage metrics. 
These factors are offset to some extent, in our opinion, by BRK's high 
tolerance for equity investment, which has resulted in volatility in the 
company's insurance subsidiaries' statutory capital, and its capital adequacy 
being less than what we typically expect to see for the rating category. 
Management succession at BRK is also an offsetting factor.

BRK fully guarantees BHFC's new note issuance. BHFC's borrowings are used to 
fund the finance operations of Vanderbilt Mortgage & Finance Inc., a wholly 
owned subsidiary of Clayton Homes Inc., a vertically integrated manufactured 
housing company.

BRK's adjusted debt leverage and interest coverage (excluding the separately 
rated subsidiaries MidAmerican Energy Holdings Co. and Burlington Northern 
Santa Fe LLC) are conservative. Debt leverage was 12.2% as of Sept. 30, 2012. 
Interest coverage was 20.6x for the first nine months of 2012. This note issue 
will not impact these metrics since we treat the debt associated with BHFC as 
operating leverage.

RELATED CRITERIA AND RESEARCH
     -- Berkshire Hathaway Finance Corp. $2.35 Billion Senior Notes 'AA+' 
Rating Affirmed After $750 Million Add-On, Sept. 19, 2012
     -- Berkshire Hathaway Finance Corp. $1.6 Billion Senior Notes Rated 
'AA+', May 10, 2012
     -- Holding Company Analysis, June 11, 2009

 
RATINGS LIST

Berkshire Hathaway Inc.
 Corporate Credit Rating                    AA+/Negative/A-1+

Ratings Unchanged
Berkshire Hathaway Finance Corp.
 $2.85 bil sr unsec notes                   AA+
 

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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