Buffett Skips Record Apple (AAPL) Offering as Corporate Debt Yields Stay 'Too Low'

May 6, 2013 8:18 AM EDT
Not even Apple (Nasdaq: AAPL) can lure Warren Buffett further into the corporate bond market.

During an interview over the weekend, Buffett noted that yields on the debt were just too low right now. His Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) held about $12.2 billion of corporate debt at the end of its latest quarter, down 14 percent over the last two years. Over the same time frame, Berkshire's equity portfolio rose about 54 percent.

Payout rate on dollar-denominated corporate debt hit 3.35 percent last week, with the yield averaging 5.87 percent over the last 10 years.

On Apple, Buffett noted that the move doesn't have anything to do with it being a tech company, a segment he generally tries to avoid.

Buffett was a fan of corporate debt back in 2009 following the fallout of the financial crisis. In a letter to shareholders, Buffett said corporate debt was "ridiculously cheap" when compared to U.S. Treasuries.

Apple is indicated higher Monday.


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