Berkshire plans $8-bn bond issue for BNSF takeover

Billionaire investor Warren Buffett-led Berkshire Hathaway plans to raise $8 billion through issue of bonds to part fund its takeover of railroad operator Burlington Northern Santa Fe Corp (BNSF).

According to the preliminary prospectus filed with the Securities and Exchange Commission (SEC), Berkshire plans to issue senior debt securities of varying maturities to raise the funds.

"We intend to use all of the net proceeds that we receive from the sale of notes as part of the cash considerate to be paid to the stockholders of BNSF in connection with our acquisition through merger of BNSF," the company stated in the filing.

"If the conditions to such acquisitions are not met, we expect to use the net proceeds for general corporate purposes," it added.

In November last year, investment holding firm Berkshire Hathaway had said it will acquire the remaining 77.4 per cent of Burlington Northern in a cash and stock deal worth $44 billion.

The transaction is understood to be the largest buyout in the history of Berkshire Hathaway.

Under the agreement, about 60 per cent of the total consideration payable by Berkshire to BNSF stockholders would be in the form of cash and 40 per cent in the form of common stock, the company said in the filing.