Moody’s reviews Broadcom for downgrade

Moody's Investors Service said it’s reviewing the ratings of Broadcom Inc. and Broadcom Cayman Finance Ltd. for a possible downgrade based on Broadcom’s announcement on acquiring Symantec Corp.’s enterprise security segment.

Moody’s is concerned that the acquisition will lead to higher leverage.

“Still, based on Moody's expectation that Broadcom will fund the acquisition with prepayable unsecured bank debt, Broadcom's stated intention to curtail share repurchases in order to direct cash toward debt repayment, and strong free cash flow generation, Moody’s expects a rapidly improving leverage profile, with debt to EBITDA (Moody's adjusted) declining by over 0.5 turns over the year following closing as debt is repaid and cost synergies are realized,” the agency said in a press release.

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