LA Times Reports
Bank of America, under fire from shareholders and analysts, is getting a $5-billion investment from Warren Buffett's investment company. The banking giant's stock soared this morning on the news.
The investment by Berkshire Hathaway is reminiscent of a $5-billion investment Buffett made in Goldman Sachs in September 2008 in the depths of the financial crisis. That injection of capital helped restore confidence in Goldman and helped the Wall Street firm attract other investments.
As with the Goldman infusion, Buffett negotiated extremely favorable terms from Bank of America. He is set to receive BofA preferred shares that will pay Berkshire a 6% dividend each year. If the bank wants to redeem the shares it has to pay Buffett a 5% premium.
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| Market-Ticker.org |
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