NEW YORK (Reuters) – Berkshire Hathaway Inc will terminate half of its bullish $16 billion bet on the credit quality of U.S. states, cities and towns, and has also cut its exposure to high yield corporate debt, it said in a regulatory filing this month.
The move comes as many investors including Berkshire Chairman, billionaire investor Warren Buffett, foresee an uptick in U.S. municipal bankruptcies.
Buffett said last month that the bankruptcies of three California cities in as many weeks was making traditionally objectionable Chapter 9 municipal bankruptcy filings more palatable to local governments in financial crises.
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