The Oracle of Omaha has spoken… Buffett tucks into some bonds while markets continue to spring haywire. Maybe now’s a good time to check how you’ve mapped bonds in your risk reports?
The decision to switch from floating to fixed could be viewed as a bet on where interest rates are headed. Or, at the very least, it could indicate that the company sees the steep decline in long-term yields over the past two months as a market-timing opportunity that’s too good to pass up.
The other interpretation is that the company chose to refinance with long-term fixed-rate debt because it sees the big drop in 30-year yields as unsustainable.