Recall that Goldman Sachs (NYSE: GS) is keenly interested in buying back the preferred shares it issued on very favorable terms to Warren Buffett back in September 2008. What kind of hit to the balance sheet would such a move entail? "If you take $5 billion out" Goldman's "capital levels will still be relatively strong," a Moody's analyst told FOX Business. T

The analyst, however, "refused to say if the rating agency gave the official green light to Goldman to proceed with unwinding the stake, thus allowing Goldman to maintain its long-term bond rating of A1." Standard & Poor's rates Goldman's long-term debt 'A'. So far, the rating agencies have remained mum.

It's fair to say that Goldman Sachs will not undertake this buyback if it will result in harm to credit costs. One might be tempted to see these sorts of articles as Goldman priming the pump for such a move.

There are many benefits to Goldman replacing the preferred shares with common shares--including freeing up top executives to pare some of their Goldman Sachs holdings. And you get the idea it will happen soon. Buffett tells FOX Business it will be a sad day when Goldman Sachs gives it the required 30-day notice. 

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