Buffett-Backed BYD Plans Most Bonds as Costs Surge: China Credit

BYD Co., the Chinese automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc., may have to sell a record amount of bonds to pay off maturing debt next year just as the government’s inflation-fighting campaign pushes corporate borrowing costs to a high.

Shareholders gave approval on Sept. 9 for BYD to sell as much as 6 billion yuan ($939 million) of bonds with a maturity no longer than 10 years. Yields on its 1 billion yuan of bonds due 2014 have surged 450 basis points to 8.89 percent since they were sold in April, according to Royal Bank of Scotland Group Plc prices. Average yields on U.S. automakers’ debt were at 2.86 percent on Sept. 15, Bank of America Merrill Lynch indexes show.