Warren Buffett’s Berkshire Hathaway Inc. (A) sold $1.6 billion of bonds, including five-year debt at a record-low coupon, to redeem senior notes due this month and replace $1 billion of debentures that matured in April.

Berkshire, which its 81-year-old billionaire chairman has built into a $204 billion company with takeovers and stock picks, sold $750 million of 1.6 percent bonds maturing in May 2017 to yield 85 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. That’s the lowest coupon for five-year, non-convertible bonds on record for the company.

The owner of railroad operator Burlington Northern Santa Fe and Lubrizol Corp., the world’s largest producer of lubricant additives, offered the debt as a rally in high-grade bonds pushes yields to record lows. Berkshire, which also sold $350 million of 10-year securities and $500 million of debt maturing in 2042, is benefiting from investors favoring U.S. investment- grade notes amid rising concern European leaders won’t be able to contain the region’s sovereign-debt crisis.

“Berkshire is obviously a high-quality name,” Ashish Shah, New York-based head of global credit investments at AllianceBernstein LP, said in a telephone interview. “Investment-grade credit is a little bit like a safe haven relative to some of the sovereign volatility that we’re seeing.”

Retiring Debt

Proceeds from Berkshire’s deal will be used to retire “some or all” of the company’s $700 million of 4.75 percent notes maturing May 15 and to replace 4 percent bonds that came due April 15, the Omaha, Nebraska-based company said today in a regulatory filing.

The new 3 percent, 10-year notes priced at a 125 basis- point spread, and the 4.4 percent, 30-year debt yielded 145 basis points more than Treasuries, Bloomberg data show. A basis point is 0.01 percentage point.

Berkshire’s $600 million of 3.4 percent bonds due in January 2022 and sold at 99.72 cents on the dollar in January traded at 103 cents on the dollar to yield 3.04 percent at 4:23 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Its $1.1 billion of 1.9 percent notes due in January 2017, which Berkshire also sold in the Jan. 24 offering to help pay for the 2010 acquisition of Burlington Northern, traded at 102 cents with a yield of 1.46 percent.

The new debt may be rated Aa2 by Moody’s Investors Service, two levels below the rankings firm’s top grade, and AA+ by Standard & Poor’s, according to a person familiar with the offering, who declined to be identified citing lack of authorization to speak publically about the deal.

Bank of America Corp., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. are managing the sale, Bloomberg data show.

Yields on investment-grade company debt rose to 3.344 percent yesterday after reaching a record 3.34 percent May 4, according to the Bank of America Merrill Lynch U.S. Corporate Master Index.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net