The afternoon deal: Kraft and Berkshire financing

February 4, 2010

BURLINGTONNORTHERN/BERKSHIREThere’s an art to financing a deal and Kraft and Berkshire Hathaway ‘s brushstrokes are showing. Kraft launched a $9.5 billion debt sale to help finance its acquisition of Cadbury, and Berkshire announced a bond sale of up to $8 billion to help pay for its acquisition of Burlington Northern Sante Fe.

Berkshire’s bond sale announcement comes on the same day S&P stripped the company of its top AAA rating, citing capital adequacy and liquidity concerns related to the Burlington acquisition. An investment strategist tells Bloomberg the ratings firms are “are hedging their bets in the event of another economic downturn.”

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