20% stake in credit rating agency cut in share sale
Warren Buffett's Berkshire Hathaway has cut lowered its stake in credit ratings agency Moody's to 16.98% from 20.4%, Reuters reports.
The sale of about eight million shares was revealed three months after Moody's stripped Berkshire of its own "Aaa" rating, and a day after the Obama administration proposed new disclosure and conflict of interest rules for rating agencies.
Buffetologist
"Berkshire's sales are not surprising given that the reputation of rating agencies is essentially on life support," said Justin Fuller, an analyst at Midway Capital Research & Management in Chicago who runs the website Buffettologist.com.
He said Berkshire might have sold Moody's to raise cash or because it found better investments elsewhere.
Sale raises $217.6m
Berkshire said its National Indemnity Co insurance unit sold 7.99 million Moody's shares at an average $27.25 per share in open market transactions from Monday to Wednesday, for gross proceeds of $217.6m. The sales cut Berkshire's stake in Moody's to 40.01 million shares from 48 million.
Berkshire paid $499m for the larger stake.
National Indemnity still owns 24.29 million Moody's shares, or 10.31 percent, while Berkshire's Geico auto insurance unit owns 15.72 million shares, or 6.67%, the filing shows.
