Goldman may repay Buffett’s $5 billion investment: report

(BestGrowthStock) – U.S. investment bank Goldman Sachs (GS.N: ) is considering paying back a $5 billion investment made by Warren Buffett’s Berkshire Hathaway Inc (BRKa.N: ), the Wall Street Journal reported, citing people familiar with the situation.

Berkshire’s cash investment in 2008 was seen as a crucial vote of confidence for Goldman at a time when most investors were keen on dumping banking stocks.

Goldman is paying Buffett 10 percent a year on the investment and may be looking to replace it with cheaper funding now available in the debt market, the WSJ said.

The dividend payment on Berkshire’s preferred shares have cost Goldman about $1 billion so far, the newspaper said.

Goldman has an option to redeem the preferred shares for $5.5 billion, though the move would trigger a charge of $1.6 billion and require approval by the U.S. Federal Reserve, the paper said.

Goldman could not be reached for comment.

(Reporting by Sakthi Prasad in Bangalore; Editing by Dan Lalor)

Goldman may repay Buffett’s $5 billion investment: report