Warren Buffett's Berkshire Hathaway has converted much of its debt in building products company USG into more than $600 million of common stock in a successful investment made in the wake of the financial crisis.
According to regulatory filings on Tuesday and Thursday, Berkshire acquired 21.39 million USG shares last month by exchanging $243.8 million of convertible notes it held in the Chicago-based company.
That boosted its USG stake to 38.46 million shares, or more than 27 percent, worth $1.09 billion as of Tuesday's close.
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The stake makes Berkshire the largest shareholder of USG. It could rise above 30 percent if Berkshire were to swap its remaining $56.2 million of USG notes, a filing shows.
A USG spokesman declined to comment on Berkshire's stake. He said USG has roughly 139 million shares outstanding on a fully diluted basis following last month's redemption.
Berkshire, based in Omaha, Neb., and Canada's Fairfax Financial Holdings in late 2008 acquired $400 million of USG convertible senior notes in a private placement.
With that deal and others in the same time period, Berkshire gained a reputation as a lender of last resort when financial markets come under strain.
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Berkshire also bought $300 million of senior notes with a 15 percent rate from motorcycle maker Harley-Davidson.
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USG last month redeemed $325 million of the notes at a premium, and Berkshire exercised its right to swap its securities into USG common stock at just $11.40 per share.
As of Sept. 30, Berkshire held 15.7 percent of USG's common stock, regulatory filings show. That percentage reflects USG's lower number of shares outstanding at the time.