“We're not buying corporate bonds of any kind now,” Buffett, 82, said Saturday during an interview with Bloomberg Television's Betty Liu in Omaha, Nebraska, where Berkshire held its annual meeting. “Not at those yields.”
Berkshire held $12.2 billion of corporate bonds as of March 31, according to a quarterly filing issued on May 3. That's down 14 percent from two years earlier. The value of Berkshire's equity portfolio climbed 54 percent to $97.2 billion in the two years ended March 31 as markets rallied and Buffett added shares of International Business Machines Corp.
Yields on debt from corporate securities to Treasuries have tumbled as the Federal Reserve slashed interest rates and bought bonds to help the economy recover from recession. The payout rate on dollar-denominated company debt fell to a record 3.35 percent on May 2, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Index. Yields have averaged 5.87 percent during the past decade.
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