Berkshire to Invest $5 Bln in BofA

Buffet says he is impressed with bank's profit generating abilities; stock rallies.

Bank of America Corp., the biggest U.S. lender, said Warren Buffett’s Berkshire Hathaway Inc. will invest $5 billion to bolster the company after losses tied to subprime mortgages drained capital. Bank of America led a rally of U.S. lenders in New York trading.

The lender will sell cumulative perpetual preferred stock to Berkshire, the Charlotte, North Carolina-based bank said today in a statement. The preferred stock pays an annual dividend of 6 percent, and Omaha, Nebraska-based Berkshire gets warrants to buy 700 million shares at about $7.14 each.

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