If I remember correctly from Oxy’s Q2 earnings call, they want to pay off another $1.8 billion of principal debt (to bring the total down to $10 billion) and will then start saving cash in preparation for redeeming the preferred. At least they’ve given themselves plenty of time (~3 years) to save up. But, you’re right, it’s a lot of money!
From Berkshire's side I'd frame it a bit differently: Oxy putting cash aside to redeem is the deal working as designed. The preferred paid its 8% for years and comes back with a premium, and that's the piece Bloomstran calls a very good investment. The common has been the weaker leg. Goldman, BofA and Oxy all followed that pattern: Berkshire was the call when capital was needed fast, on terms nobody else got. That's what I'm curious about under Abel, and the Tokio Marine partnership looks like one way to keep that call coming, with the balance sheet rather than Buffett personally as the draw.
From the Q2 13F we track: Berkshire's reported portfolio is $299,254M across 29 share positions, with AAPL at $65,950M - 22.0% of it. The 12 largest are 93.2% of the reported total. Full drawing at bastionmemos.com/13f.
Admittedly I’m no analyst, but OXY paying off that preferred doesn’t seem so easy to me, I think they will, but its a lot of $
If I remember correctly from Oxy’s Q2 earnings call, they want to pay off another $1.8 billion of principal debt (to bring the total down to $10 billion) and will then start saving cash in preparation for redeeming the preferred. At least they’ve given themselves plenty of time (~3 years) to save up. But, you’re right, it’s a lot of money!
From Berkshire's side I'd frame it a bit differently: Oxy putting cash aside to redeem is the deal working as designed. The preferred paid its 8% for years and comes back with a premium, and that's the piece Bloomstran calls a very good investment. The common has been the weaker leg. Goldman, BofA and Oxy all followed that pattern: Berkshire was the call when capital was needed fast, on terms nobody else got. That's what I'm curious about under Abel, and the Tokio Marine partnership looks like one way to keep that call coming, with the balance sheet rather than Buffett personally as the draw.
Thanks for featuring the MiB podcast - greatly appreciated!
It was an awesome interview! You did a great job.
Thanks so much!
From the Q2 13F we track: Berkshire's reported portfolio is $299,254M across 29 share positions, with AAPL at $65,950M - 22.0% of it. The 12 largest are 93.2% of the reported total. Full drawing at bastionmemos.com/13f.