Subject: [NEXTEL-1] Berkshire Takes Big Stake in Nextel

From: [email-masked]
Date: Fri, 29 Aug 2003 04:30:00 -0400

Berkshire Takes Big Stake in Nextel
By Stephen Schurr
Senior Editor
08/28/2003 05:31 PM EDT

Berkshire Hathaway's (BRK.A:NYSE) recent shine for telecom debt and
preferred stock continues, with Nextel (NXTL:Nasdaq) being a big
beneficiary, according to the latest filings. 

As of June 30, Berkshire and subsidiaries of Warren Buffett's
insurance-investment empire owned $468.6 million in Nextel notes and
preferred shares, according to filings this week with the National
Association of Insurance Commissioners. 

The purchases, which began in October 2002 and continued through at
least June 26, are another example of Berkshire's recent interest in
the beaten-down telecommunications industry. Berkshire has reported
owning debt or stock of a handful of telecom concerns, including Level
3 Communications (LVLT:Nasdaq) and WilTel Communications (WTL:NYSE) ,
among others. 

Berkshire and its Geico and General Re insurance subsidiaries
purchased $68.2 million in 10.65% notes set to mature September 2007.
These purchases were made in December and January. In December through
May, Berkshire, Geico and General Re also purchased $110.6 million in
9.75% notes due October 2007. Berkshire and affiliates also bought
$68.2 million in 9.95% senior notes due February 2008, $45.9 million
in 9.375% notes due November 2009 and $14.3 million in 9.5% notes due
February 2001. 

Berkshire also purchased $161.5 million in Nextel preferred shares
between October and June. Of the preferred stock, $105.3 million
offered a 13% coupon rate with a 2009 maturity and $56.2 million
carried an 11.125% coupon rate, maturing in 2010. The preferred shares
carry either 11.125% coupons or 13% coupons. Since the filings only
run through June 30, it wasn't clear if Berkshire was still acquiring
Nextel debt or preferred stock. 

Perhaps Buffett talks shop while playing bridge with his card mate,
Bill Gates. The Microsoft (MSFT:Nasdaq) founder, through his personal
investment vehicle Cascade Investments LLC, owns a 5.2% stake in
Nextel Partners (NXTP:Nasdaq) , a U.S.-based affiliate of telecom
giant Nextel (NXTL:NYSE) . 

Cascade first reported the stake, currently valued at about $93
million, in March 2002.

http://www.thestreet.com/pf/funds/stephenschurr/10110767.html

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