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please click your print icon! Moody's rates Berkshire Hathaway Finance Corp's notes Aaa $2 billion of 144A notes to be issued. New York, May 07, 2008 -- Moody's Investors Service has assigned Aaa ratings to $1 billion of five-year and $1 billion of 10-year senior unsecured notes being issued by Berkshire Hathaway Finance Corporation ("BHFC"). The senior unsecured notes will be unconditionally and irrevocably guaranteed by Berkshire Hathaway Inc. ("Berkshire") (NYSE: BRKA - long-term issuer rating of Aaa, short-term issuer rating of P-1). The notes are being offered to qualified US institutional buyers under Rule 144A of the Securities Act of 1933 (with registration rights) and to certain non-US persons under Regulation S. The rating outlook is stable. Net proceeds from the offering are expected to be used to provide financing to Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt"), a wholly owned subsidiary of Clayton Homes, Inc. ("Clayton"), which is an indirect wholly owned subsidiary of Berkshire. Vanderbilt in turn provides installment financing to certain purchasers of homes sold by Clayton and also makes bulk purchases of manufactured housing loans from banks and other lenders. BHFC is part of Berkshire's finance and financial products sector, which accounted for more than one-third of Berkshire's consolidated debt outstanding as of March 31, 2008. A majority of the finance and financial products borrowings are guaranteed by Berkshire. According to Moody's, the Berkshire ratings reflect the group's strong market presence in its principal (re)insurance operations, the diversification of its earnings in both regulated and non-regulated businesses, and its exceptionally strong balance sheet. The ratings also reflect the conservative operating and financial principles of the current management team. These strengths are tempered by concerns over management succession and by the company's exposure to earnings and capital volatility related to large individual underwriting transactions and investment positions. Moody's cited the following factors that could lead to a downgrade of Berkshire's ratings: (i) a material change in the business mix such that (re)insurance is no longer the main business; (ii) major catastrophe losses causing a net decline in equity of more than 5% in a given year or where Berkshire's share of insurance industry losses significantly exceeds 5%; or (iii) a material shift toward a less conservative financial profile (e.g., adjusted financial leverage, excluding debt of the utilities and energy and the finance and financial products sectors, exceeding 10%). The last rating action involving BHFC took place on January 9, 2008, when Moody's assigned Aaa ratings to three-year and five-year notes issued by BHFC and guaranteed by Berkshire. Based in Omaha, Nebraska, Berkshire is a holding company engaged through subsidiaries in diversified businesses that fall into four broad sectors: property & casualty (re)insurance; utilities and energy; manufacturing, services and retailing; and finance and financial products. Berkshire also holds meaningful minority interests in several prominent financial and consumer products firms through its portfolio of common stocks, held mainly by its (re)insurance subsidiaries. Berkshire reported total revenues of $25.2 billion and net income of $940 million for the first quarter of 2008. Shareholders' equity was $119.4 billion as of March 31, 2008. For more information, please visit www.moodys.com/insurance New York Bruce Ballentine VP - Senior Credit Officer Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York Robert Riegel Managing Director Financial Institutions Group Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Return to today's INSURANCE NEWSCAST
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