01/29/2009 05:12 am ET Updated May 25, 2011

Warren Buffett Wins $224 Million Bet With Florida

Dec. 29 (Bloomberg) -- Billionaire Warren Buffett's Berkshire Hathaway Inc. won a $224 million bet with Florida after the state sidestepped major damage from hurricanes this year.

Florida's option agreement that would have compelled Buffett to buy $4 billion of bonds to finance storm recovery will expire Dec. 31, Dennis MacKee, a spokesman for the State Board of Administration, said in an interview today. The state earlier paid Buffett $224 million in return for his commitment to buy the debt if needed. The calm season meant Florida had no need to raise the money.

Florida turned to Omaha, Nebraska-based Berkshire to erase doubts about the state's ability to raise money after a hurricane. The state sells coverage to homeowners and private companies at below-market rates, and plans to fund cash shortfalls in the bond market. Finding investors could be a "very challenging task," Fitch Ratings said in March.

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