Brian Chappatta, Columnist

Is Warren Buffett Sending a Signal About the Bond Market?

Berkshire Hathaway is refinancing floating-rate notes with 30-year fixed-rate debt. Traders take notice.

January 3, 2019 at 6:21 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Has Warren Buffett solved the debt puzzle?
Photographer: Daniel Acker/Bloomberg

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Warren Buffett is wading into the bond market with a new deal, leaving traders wondering whether the Oracle of Omaha is making a prediction about the direction of interest rates.

Berkshire Hathaway Finance Corp.1 is issuing 30-year fixed-rate bonds to refinance $950 million of floating-rate senior notes that mature at the end of next week. The decision to switch from floating to fixed could be viewed as a bet on where interest rates are headed. Or, at the very least, it could indicate that the company sees the steep decline in long-term yields over the past two months as a market-timing opportunity that’s too good to pass up.