Bloomberg News

Berkshire’s Wrigley Bonds With 11.45% Interest Repaid by Mars

October 04, 2013

Mars Inc. said it retired $4.4 billion in bonds that Warren Buffett’s Berkshire Hathaway Inc. bought in 2008 when he helped the candy company acquire Wm. Wrigley Jr. Co.

The maker of M&M’s candies was paying 11.45 percent on the notes, which were due in 2018. Mars had the right to end the arrangement with a prepayment premium.

Buffett backed Mars’s $23 billion purchase of the chewing gum maker in October 2008 with the debt financing and an agreement to take a $2.1 billion stake in the Wrigley division. Closely held Mars joins Goldman Sachs Group Inc., General Electric Co. (GE:US) and Swiss Re Ltd. in repaying Berkshire for investments made during periods when Buffett was able to charge historically high interest rates.

“Since Wrigley’s acquisition by Mars in 2008 we have on a number of occasions refinanced portions of our debt in order to take advantage of our improved credit rating and lower interest rates,” Ryan Bowling, a spokesman for McLean, Virginia-based Mars, said in an e-mailed statement. He said the notes were repaid Oct. 1 and that Berkshire remains a minority investor in Wrigley, while declining to comment further.

The repayment was reported earlier today by the Wall Street Journal, which said Mars bought back the securities at 115.45 percent of face value, a premium of about $680 million. Buffett didn’t return a message left with an assistant.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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