Standard & Poor's Ratings Services gave an investment grade rating to the debt issued by Berkshire Hathaway Finance Corp.

The unit funds the finance operations of a Tennessee-based modular home builder named Clayton Homes Inc., which is also owned by the conglomerate led by billionaire investor Warren E. Buffett.

S&P assigned an "AA-plus" senior debt rating to Berkshire Hathaway Finance Corp.'s $1.5 billion senior notes.

The notes were issued in three groups: $375 million of 1.5 percent, three-year fixed rate notes, $375 million of three-year floating rate notes and $750 million of 4.25 percent, 10-year fixed rate notes. Berkshire Hathaway Finance is expected to use the proceeds to repay $1.5 billion of notes maturing on Jan. 15.

Berkshire Hathaway Finance's borrowings are used to fund the finance operations of Vanderbilt Mortgage & Finance Inc., a subsidiary of Clayton Homes Inc.

S&P said the assigned rating is based on the ratings on Berkshire Hathaway as the finance arm's ultimate parent. That reflects "the extremely strong competitive position, very strong earnings, very strong liquidity position, and conservative financial leverage and
coverage metrics," of the conglomerate, the ratings agency said.

Those factors are somewhat offset by Berkshire Hathaway's high tolerance for investment risk and the resulting volatility in the statutory capital of its insurance subsidiaries, and the issue of management succession for the 80-year-old executive.

Tuesday, Class A shares of Berkshire Hathaway fell $298 to close at $120,200. Class B shares slipped 24 cents to $80.17.