Tuesday, April 12, 2011

Berkshire (BRK-A) Hires Wells (WFC) for Bond Underwriting

Warren Buffett's Berkshire Hathaway (NYSE:BRK-A), which has a huge stake in Wells Fargo (NYSE:WFC), has hired the investment banking unit of the company to underwrite a $1.5 billion bond offering in January.

With not much growth opportunity in retail and commercial banking, Wells Fargo is looking to expand its investment banking operations to compete more with giants in that segment like Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JP Morgan Chase (NYSE:JPM), which are far larger in that area.

Contrary to the strategies used by its rivals, it appears Wells Fargo isn't going to go the route of hiring the big players in investment banking, rather they're attempting to market its strong balance sheet in hopes of attracting underwriting clients, according to the Wall Street Journal.

Wells Fargo was trading at $31.32, falling $0.08, or 0.25 percent, as of 1:24 PM EDT. Berkshire was trading at $122,377., down $1,120.00, or 0.91 percent.

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