Berkshire's Weschler gets Buffett-style interest rate
| Berkshire's Weschler gets Buffett-style interest rate Warren Buffett isn't the only person at Berkshire who can extract a hefty interest rate ... along with some potentially profitable stock warrants ... from a borrower looking for some cash.
In a deal credited to investment manager Ted Weschler, Berkshire is loaning $600 million to E.W. Scripps to help finance its $2.65 billion acquisition of ION Media.
The loan, in the form of Berkshire's purchase of preferred shares, pays a dividend of 8% annually if paid in cash. (It's 9% if payment is deferred.)
In addition, Berkshire gets the right to purchase up to 23.1 million Scripps Class A shares at $13 each.
Thanks in part to Berkshire's "seal of approval" for the Scripps deal, that company's shares jumped sharply on the announcement yesterday, soaring as much as 43% to an intraday high of $15.00 from Wednesday's close of $10.47.
It quickly retreated, ending today at $11.62. Still, that's closer to being "in the money" for Berkshire's warrants.
OXY goes back to cash to pay Berkshire its dividend One of Buffett's big interest rate deals was Berkshire's 2019 $10 billion loan, also at 8% a year and in the form of a purchase of preferred shares, to Occidental Petroleum.
Sharply lower oil prices, however, have hurt that company. It's used common stock to make two quarterly dividend payments this year in an effort to conserve cash. (Berkshire quickly sold the shares it received in the first payout.)
It's going back to cash, however, for its upcoming October dividend, and that's seen as a good sign for the company.
Morningstar's David Meats tells Reuters that Occidental can "generate substantial free cash at current oil prices." As a result, "There's no need to pay the preferred in stock, and the decision to do so earlier was probably due to abundance of caution at the outset of the pandemic and associated oil downturn."
Berkshire trims DaVita holding but stake percentage increases Berkshire participated in a DaVita stock buyback, selling the kidney dialysis company 2 million DVA shares at $88 each.
Since the buyback reduced DaVita's outstanding shares by almost 8 million, Berkshire stake increased from 30.2% to 31.7%, even though it now owns fewer shares.
New CEO of Buffett's railroad sees improving economy The incoming CEO of Berkshire Hathaway's BNSF Railway tells CNBC that while the pandemic has made it a tough year for shipments, things are getting better.
On Squawk Box today, Katie Farmer said, "We have seen the economy start to pick up relative to rail loadings."
Specifically, "We definitely have seen our consumer products business increase rapidly over the last few weeks."
Farmer has been with BNSF for 28 years, starting as an intern. When she takes over on January 1, she will be the first female CEO of a major railroad.
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BERKSHIRE STOCK WATCH
  BERKSHIRE'S TOP STOCK HOLDINGS - Sept 25, 2020
 Berkshire's top stock holdings by market value, based on today's closing prices.
Holdings are as of June 30, 2020 as reported in Berkshire Hathaway's 13F filing on August 14, 2020 and other filings, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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-- Alex Crippen, Editor, Warren Buffett Watch
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