5 November, 2009
Fitch may cut Berkshire rating on Burlington buy
NEW YORK, Nov 5 (Reuters) - Fitch Ratings on Thursday said it may cut its ratings on Berkshire Hathaway Inc (BRKa.N) BRKb,N, on concerns about the effect the acquisition of Burlington Northern Santa Fe Corp (BNI.N) will have on its asset profile and capitalization.
Fitch said it may cut Warren Buffett's Berkshire from AA-plus, the second-highest investment grade.
The acquisition of Burlington and other utilities, energy and finance company subsidiaries, has shifted Berkshire's asset profile to have a higher concentration in companies that have more leverage, Fitch said.
Many of the companies are also more sensitive to general economic conditions than Berkshire's long-held insurance and holding company equity-oriented investments, the rating agency added.
Berkshire Hathaway on Tuesday said it has agreed to pay $26 billion in cash and stock to buy Burlington in a bet the railroad operator will benefit from a recovering U.S. economy. For details click on [ID:nN03483590]. Berkshire is also assuming about $10 billion of Burlington debt. (Reporting by Karen Brettell; Editing by Kenneth Barry)
Source: http://www.reuters.com
Fitch may cut Berkshire rating on Burlington buy Added: (05.11.2009)
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