S&P gives Broadcom notes BBB-

S&P said it affirmed its ratings, including the BBB- corporate credit rating, on Broadcom Ltd. and assigned a BBB- issue-level ratings to the company's new senior unsecured notes.

The outlook is positive.

The company plans to issue the notes to primarily finance the Brocade acquisition. If the acquisition is not completed, proceeds will be used for general corporate purposes, including any future acquisitions.

Since S&P’s upgrade of the company last December, Broadcom has reduced leverage to about 1.3x as of July 31, and is on pace to generate free cash flow totaling about $5 billion for the fiscal year ending Oct. 31.

“We do not anticipate the proposed debt raise and the inclusion of Brocade's operations will materially alter these credit measures,” the agency said in a news release.

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