Bank of America Corp., the largest U.S. lender, said Warren Buffett’s Berkshire Hathaway Inc. will invest $5 billion to bolster the company after losses tied to subprime mortgages drained capital, Bloomberg reported.

Bank of America said it will sell cumulative perpetual preferred stock to Berkshire. The preferred stock pays an annual dividend of 6 percent, and Berkshire will receive warrants to buy 700 million shares at $7.14 each.

Bank of America lost almost half its value since June on the New York Stock Exchange through yesterday as investors speculated it would have to access the public markets to raise capital. CEO Brian Moynihan has said the company won’t need to issue shares to comply with new international capital standards and to settle claims surrounding defective mortgages.

Buffett helped Goldman Sachs Group Inc. during the credit crisis in 2008 with a $5 billion investment that was repaid this year. The Goldman Sachs investment paid a 10 percent dividend.

Berkshire is also the largest stock investor in Wells Fargo & Co., the only U.S. home lender larger than Bank of America.

Bank of America shares surged 21 percent on the New York Stock Exchange as of mid-morning.