(Bloomberg) — Liberty Mutual Group Inc. issued $750 million of bonds to help finance a payment to a unit of Warren Buffett's Berkshire Hathaway Inc. for covering the insurance company's liabilities tied to asbestos.
The 4.85%, 30-year notes were sold to yield 160 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. Standard & Poor's increased Liberty Mutual's rating one level to BBB from BBB- after Berkshire's National Indemnity Co. agreed last week to provide as much as $6.5 billion of coverage for the insurance company's liabilities for asbestos, environmental and workers' compensation policies.
“This agreement covers Liberty Mutual's potentially volatile U.S. A&E liabilities and largely mitigates potential risks from future adverse reserve developments,” Tracy Dolin, an S&P analyst, said in a statement.
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