Tags: Berkshire Hathaway | S&P | Warren Buffett | Rating

Berkshire Hathaway Raised to Stable at S&P on Capital Levels

Monday, 23 Jun 2014 02:19 PM

Warren Buffett’s Berkshire Hathaway Inc. had its credit outlook raised to stable from negative at Standard & Poor’s as the company’s capital position strengthened. The AA rating was affirmed.

“Capital adequacy has improved since 2013,” the ratings firm said today in a statement about Omaha, Nebraska-based Berkshire. “The insurance operating companies will maintain extremely strong capitalization and sustained operating performance at or beyond our base-case scenario.”

Berkshire had the top credit rating from S&P, Fitch Ratings and Moody’s Investors Service as recently as 2009. The company was stripped of its AAA at S&P in 2010 after agreeing to buy railroad Burlington Northern Santa Fe for $26.5 billion. Fluctuations in the value of Buffett’s equity investments have also weighed on the company’s creditworthiness, S&P said.

“We believe BRK will remain subject to an aggressive acquisition strategy,” S&P said in the statement, referring to the company by its ticker symbol. “This risk is largely offset by the strength and stability of earnings generated by the consolidated group.”

As Berkshire’s chairman and chief executive officer for more than four decades, Buffett, 83, built the firm from a textile maker into a company that sells insurance, hauls freight, generates electricity, manufactures chemicals and sells products from diamonds to underwear. The billionaire has used funds from insurance units including Geico to buy stocks and make acquisitions.

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