In the January post "Reinsurance Industry Approaches Record Levels" (BRK-B; BRK-A) I referred to the Swiss Re paper that Berkshire holds as "Yummy". [technical term?-ed]
From Reuters via the New York Times:
Swiss Re, the world's second-biggest reinsurer, boosted its capital by around $3 billion, giving it confidence it can repay a costly convertible loan from billionaire Warren Buffett and regain a key credit rating.
A much improved investment performance also enabled the company to beat profit expectations for the first quarter, despite large natural catastrophe claims eating into earnings.
Swiss Re, which had to take a costly convertible loan from Buffett-owned rival Berkshire Hathaway last year after bets on risky assets backfired, said its excess capital rose to more than $12 billion, improving its chances of recapturing its coveted AA credit rating and repaying Buffett.
"This level of excess capital gives us increased confidence that we can regain the AA rating," said Swiss Re Chief Financial Officer George Quinn. "We'll also be able to redeem the Berkshire Hathaway investment and still retain a very significant buffer above the minimum level required for AA."
Shares in Swiss Re traded 5.5 percent higher at 0909 GMT, outperforming a 0.7 percent rise in the STOXX 600 European insurance index, which was held back by a 2.7 percent fall in Axa after Europe's second-largest insurer gave disappointing first-quarter numbers....MORE
The notes pay 12% and are convertible into Swiss Re common at 25 Swiss francs (CHF).
With the stock (RUKN) trading at 45.65 CHF management has some incentive to avoid the dilution.
However, if I recall correctly (no time to look it up, sorry) they have to pay a 40% premium to buy their way out. Berkshire also owns 3% of RUKN.