Fitch Affirms Welsh Road Funding LLC at ‘F1+sf’

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the rating for Welsh Road Funding LLC (Welsh Road) as follows:

--$2,500,000,000 commercial paper (CP) notes at 'F1+sf'.

KEY RATING DRIVERS

The rating of the notes is based upon the rating of the guarantor of the surety, Berkshire Hathaway Inc. (BHI; Issuer Default Rating [IDR] 'AA-' with a Stable Outlook). Fitch considers BHI to be an eligible direct-support counterparty based on the strength of its long-term rating and Stable Outlook. A long-term rating of 'AA-' correlates to a short-term rating of 'F1+', but lower long-term ratings have a correlation that may overlap multiple short-term ratings.

The notes are supported by a $2.5 billion unconditional and irrevocable surety issued by Columbia Insurance Company (Insurer Financial Strength [IFS] rating of 'AA+' with a Stable Outlook), which is further enhanced by a corporate guaranty made by BHI.

RATING SENSITIVITIES

The rating remains sensitive to the rating migration of BHI. A downgrade of more than one rating notch to BHI would likely result in a downgrade to the notes. Such a determination would be decided by a rating committee, taking into consideration input provided by Fitch's Corporates group regarding the short-term financial position of BHI.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Global Rating Criteria for Asset-Backed Commercial Paper (pub. 30 Oct 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=797648

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=991145

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991145

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Fitch Ratings

Primary Analyst

Shashi Srikantan
Director

+1-212-908-0393

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson

Kevin Corrigan
Senior Director

+1-212-908-0156

or

Media Relations:

Sandro Scenga, +1 212-908-0278

[email protected]

Source: Fitch Ratings