Broadcom Inc. has announced an agreement to acquire VMWare Inc. for approximately $61 billion in cash and stock. Broadcom has obtained commitments for $32 billion of new debt and will be assuming $8 billion of net debt from VMWare, leading to pro forma leverage of about 3x, excluding synergies. We placed our 'BBB-' issuer credit rating on Broadcom and all our ratings on the company's debt on CreditWatch with positive implications. The CreditWatch placement reflects our view that this transaction will meaningfully improve the stability of Broadcom's operating performance by increasing its share of recurring software revenue. We will monitor developments related to the proposed transaction, including required approvals and any developments from VMWare's 40 day go-shop period. In addition,
