Warren Buffett's Berkshire Hathaway launches first ever euro-denominated bonds
The ECB is printing money and suddenly it has some help. Berkshire Hathaway CEO Warren Buffett will raise around 3 billion euros at rock bottom prices. Early indications are that the longest durations -- 20-year notes -- will yield less than 2%.
What will Buffett do with 3 billion euros? Immediately convert them into dollars, the company says. That's 3 billion that will go toward weakening the euro. He's not the only one.
"It's so cheap to borrow in euros that it's a no brainer," said James Athey, a fund manager at Aberdeen Asset Management in London. "It's something we expect to see more and more of to the point where, potentially, U.S. corporates are issuing far less in their own market and issuing far more in Europe," he said.
ECB QE has helped drive shorter-term borrowing rates to unthinkably low levels. Yesterday GDF Suez sold two-year notes with a yield of just 0.13%. That's virtually free money.
If the trend continues to explode, and especially if it's simply US borrowers who will immediately convert into dollars, then the euro could fall a long way below the 11-year lows hit on Thursday.
Warren Buffett looking across the Atlantic Ocean
