Warren Buffett To Purchase More Corporate Debt, Securities Abroad

Berkshire Hathaway (NYSE: BRK.A and BRK.B), the holding company owned by billionaire Warren Buffett, is buying corporate debt and securities issued by governments outside the U.S., according to Bloomberg on Sunday.

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The move comes as Buffett's spending on stocks falls to the lowest in more than five years.

Berkshire held about $11.1 billion in foreign government bonds in its insurance units as of June 30, compared with $9.6 billion three months earlier, the company said in a regulatory filing Aug. 7 announcing second-quarter results. Buffett, 78, spent $2.6 billion in fixed-maturity securities in the three months ended June 30 compared with $350 million on stocks.

Berkshire posted its first profit gain since 2007 as payments from securities issued by Goldman Sachs Group Inc. (NYSE: GS) and General Electric Co. (NYSE: GE) boosted investment income. However, the company suffered some downturn as results slumped at operating units including NetJets Inc., which is currently losing money, and companies in Berkshire’s equity portfolio including Wells Fargo & Co. (NYSE: WFC) slashed dividends.

The $8 billion in investments in preferred shares of Goldman Sachs and GE are paying Berkshire 10 percent annual interest. Combined with the purchase of similar securities sold by Swiss Reinsurance Co., and Berkshire’s investment in debt in companies including candy manufacturer Mars Inc. and Vulcan Materials Co. (NYSE: VMC), the firm’s announced fixed-income deals since September pay interest of more than $1.8 billion annually.

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