The Goldman Sachs Group Inc. announced that it is raising US$75.5 billion, including US$5 billion from Warren Buffett’s Berkshire Hathaway Inc.

Goldman said it has reached an agreement to sell US$5 billion of perpetual preferred stock to Berkshire in a private offering. The preferred stock has a dividend of 10% and is callable at any time at a 10% premium. In conjunction with this offering, Berkshire Hathaway will also receive warrants to purchase US$5 billion of common stock with a strike price of US$115 per share, which are exercisable at any time for five years.

In addition, Goldman Sachs is raising at least US$2.5 billion in common equity in a public offering.

Earlier this week, Goldman abandoned its investment bank status and will convert into a bank holding company, subject to increased oversight of the U.S. Federal Reserve Board.

Credit-rating agency DBRS said it views the move positively, adding that it should help increase market confidence and fortify Goldman’s balance sheet. The company’s ratings remain unchanged.

“DBRS views these capital actions positively as it will enhance capital, liquidity and importantly market confidence. Specifically, the preferred and common equity offering, when completed, will increase total shareholders equity by 16.4% from the end of the third quarter. These capital raises will also help Goldman with its transition to a bank holding company,” it said.

“We are pleased that given our long-standing relationship, Warren Buffett, arguably the world’s most admired and successful investor, has decided to make such a significant investment in Goldman Sachs. We view it as a strong validation of our client franchise and future prospects,” said Lloyd Blankfein, chairman and CEO of Goldman Sachs. “This investment will further bolster our strong capitalization and liquidity position.”

“Goldman Sachs is an exceptional institution,” said Warren Buffett, chairman and CEO of Berkshire. “It has an unrivalled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.”