Bulletin: Broadcom Inc. $3.2 Billion Mandatory Convertible Stock Sale Will Reduce Leverage Modestly; Ratings Unchanged

NEW YORK (S&P Global Ratings) Sept. 25, 2019--Broadcom Inc. has concluded a public offering of $3.2 billion of mandatory convertible preferred stock, intending to use proceeds to repay outstanding term loan indebtedness. We consider these securities to have high equity content under our criteria and exclude them from our calculation of the firm's debt. We expect this transaction will reduce Broadcom's peak pro forma leverage at the close of its acquisition of Symantec Corp.'s enterprise security business to approximately 3.3x, down from our previous estimate of 3.6x. Although this transaction on its own does not change our rating or outlook on the firm, we believe it lowers the risk of a downgrade should EBITDA generation be weaker than expected over

...NEW YORK (S&P Global Ratings) Sept. 25, 2019--Broadcom Inc. has concluded a public offering of $3.2 billion of mandatory convertible preferred stock, intending to use proceeds to repay outstanding term loan indebtedness. We consider these securities to have high equity content under our criteria and exclude them from our calculation of the firm's debt. We expect this transaction will reduce Broadcom's peak pro forma leverage at the close of its acquisition of Symantec Corp.'s enterprise security business to approximately 3.3x, down from our previous estimate of 3.6x. Although this transaction on its own does not change our rating or outlook on the firm, we believe it lowers the risk of a downgrade should EBITDA generation be weaker than expected over the next year. Furthermore, by reducing pro forma leverage to under 3.5, it brings credit metrics back to a level that we view as commensurate with the '###-' rating. Our stable outlook continues to be based on a view that leverage will decline...

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