Thu Jan 17, 2013, 04:30 PM
banned from Kos (4,017 posts)
Bank of America complains about paying 6-9% to borrow money.
Bank of America Corp., the second- largest U.S. lender, said repaying Warren Buffett’s $5 billion investment may wait until the company redeems preferred stock held by other investors getting a higher dividend.
“We’ve got over $5 billion of straight preferred stock that’s got coupons between 8 and 9 percent,” compared with the 6 percent paid to Buffett’s Berkshire Hathaway Inc. (BRK/A), Chief Financial Officer Bruce Thompson told reporters today in a conference call. “From an expensive-capital perspective, that’s the real expensive piece.”
5 replies, 1073 views
Bank of America complains about paying 6-9% to borrow money. (Original post)
|banned from Kos||Jan 2013||OP|
Response to nykym (Reply #2)
Thu Jan 17, 2013, 05:24 PM
mostlyconfused (206 posts)
3. Really? Why? Seems like a reasonable decision to me
If I had $1,000 each on two different credit cards, I'm paying off the one with the higher interest rate first. That saves me money. What financial analyst would dislike that kind of decision and downgrade stock for it?
Response to banned from Kos (Original post)
Wed Jan 23, 2013, 11:23 PM
Yo_Mama (6,301 posts)
5. It's not complaining - it's just paying it off
I'm sure Buffett's very happy about that - six percent on an investment that's getting safer all the time.
The ones who are going to be grousing are those getting bought out of their preferreds - where do you get returns like that in this environment?