Posted on 02/05/2009 10:55:14 AM PST by NormsRevenge
ZURICH (AFP) – The world's biggest reinsurer Swiss Re turned to Wall Street sage Warren Buffett for fresh funds Thursday after massive losses while Zurich Financial earnings plunged due to the global financial crisis .
Swiss Re shares tumbled on the news, with the stock down 28.1 percent at 21.7 francs by close of trading while the overall Swiss Market Index fell by 2.3 percent.
The insurance sector woes dealt another blow to Switzerland's prized status as a major world financial centre, already under pressure after colossal losses and writedowns incurred by the country's biggest banks, UBS and Credit Suisse.
Swiss Re on Thursday warned of one billion Swiss francs (860 million dollars, 672 million euros) in net losses for 2008.
The reinsurer said it had obtained 3.0 billion Swiss francs from Buffett's investment vehicle Berkshire Hathaway as it sought to avoid a downgrade in its credit rating -- a move which would increase its funding costs.
The US billionaire investor could hold "over 20 percent" of the reinsurer under certain conditions, said Swiss Re chief financial officer George Quinn.
Buffett's investment is made in the form of a convertible capital instrument issued by Swiss Re, which after three years could be turned into Swiss Re shares at a price of 25 francs per share.
Berkshire Hathaway early last year took a 3.0 percent stake in Swiss Re for an undisclosed sum. Buffett, renowned for his spectacular success as a long-term stock investor and widely known as the "Sage of Omaha," also bought about 0.5 percent of the shares in German reinsurance group Munich Re last year, according to the Frankfurter Allgemeine Zeitung.
(Excerpt) Read more at news.yahoo.com ...
My Swiss Army knife is still holding up..
Considering how much money he pumped into Obama’s campaign, we need to see the HA HA graphic.
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