Back in 2008, Warren Buffett’s $5 billion investment in Goldman Sachs did a lot to calm fears that Goldman was exposed to the subprime crisis.
Now, reports the Wall Street Journal, the firm might repay Buffett.
Because it’s too expensive. The deal was Goldman would pay 10% a year on the investment.
Goldman needed the “vote of confidence” from Buffett and it helped them enormously back then. The firm raised $5 billion the day after Buffett’s investment.
Now, they don’t need it.
There’s just one issue.
From the Wall Street Journal:
Goldman has the option to redeem the preferred shares held by Berkshire for $5.5 billion, though the move would trigger a charge of $1.6 billion and require approval by the Federal Reserve.