S&P’s affirmed its “AAA”/”A-1+”counterparty credit, “A-1+” commercial paper, and “AAA” senior debt ratings on Berkshire Hathaway Inc. because of the company’s extremely strong financial flexibility and earnings diversification and its insurance operations’ extremely strong consolidated capital adequacy. S&P’s outlook on Berkshire Hathaway is stable.
Offsetting these positive factors are Berkshire Hathaway’s exposure to market risk; its reinsurance operations susceptibility to loss severity; the uncertainty surrounding prior-year reserve requirements for the General Re Group, its subsidiary; and the entwinement of
Berkshire Hathaway’s non-insurance earnings performance with the general economy.
S&P’s believes Berkshire Hathaway will continue to maintain extremely strong capitalization and financial leverage, supported by a strong, diversified earnings stream. Barring the potential negative earnings impact of large-loss events or investment risk, S&P’s believes Berkshire Hathaway’s prospective financial leverage and interest coverage will continue to remain within the rating range.
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