"Basically we love the position of being an owner," says Buffett of the 10-year warrants Berkshire (BRK.A, BRK.B) received when it purchased a $5B preferred stake in Bank of America (BAC) in 2011. The warrants are struck at $7.14 each and allow the purchase of 700M shares of BofA common up to the year 2021 (last night's close was $14.61; bravo, Mr. Buffett).
Buffett expects to hold the warrants until near-expiration and then convert them to common stock, though that calculation could change were the bank to institute a significant dividend.
On redeeming Buffett's preferred stake, BofA CEO Moynihan says the bank has more expensive capital to retire first. "There will be some day that we’ll talk about this, but that’s far out there."