GE To Buffett: "Thanks, Take Your Preferred Shares Back!" (GE, BRK-A, GS, BAC)

Banking, finance, and taxes

Published: September 13, 2011 5:16 pm

Last Updated: April 27, 2020 10:05 pm

General Electric Co. (NYSE: GE) is making good on a promise it made earlier this year: it is paying back Warren Buffett. An SEC filing after the closing bell shows that GE mailed to Berkshire Hathaway Inc. (NYSE: BRK-A) a redemption notice for the $3 billion in preferred shares that Buffett invested during the peak of the financial crisis.

The filing notes: “On September 13, 2011, General Electric Company (the “Company”) mailed notices of redemption to Berkshire Hathaway Inc. stating that the Company would redeem in full the Preferred Shares held by Berkshire Hathaway Inc. for the stated redemption price of $3.3 billion (which includes a 10% redemption premium), plus accrued and unpaid dividends to the redemption date. The redemption date will be October 17, 2011.”

This was a $3 billion investment and the $3.3 billion is to reflect that penalty. If you recall, Goldman Sachs Group Inc. (NYSE: GS) made more or less the same sort of repayment earlier this year. Hopefully, Bank of America Corporation (NYSE: BAC) will get to make the same sort of announcement down the road. BofA’s recent borrowing sounds cheap because Buffett got both G.E. and Goldman at 10% on the preferred shares.

There is only one thing investors should take from this: G.E. is simply paying down more of its expensive borrowings.

FULL SEC FILING from G.E.

JON C. OGG

The Average American Has No Idea How Much Money You Can Make Today ^(Sponsor)

The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.

But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

¹https://www.fdic.gov/national-rates-and-rate-caps