Fitch ends watch on VMWare

Fitch Ratings said it resolved the rating watch negative on VMware, Inc. following the Nov. 22, close of Broadcom Inc.'s acquisition of VMware, and downgraded the long-term issuer and default and senior unsecured ratings to BBB- from BBB. The outlook for Broadcom and its wholly-owned subsidiaries, which now includes VMware, is stable.

Concurrently, the agency affirmed its BBB- IDR and senior unsecured ratings for Broadcom and its subsidiary Broadcom Technologies Inc. and CA Inc.

“The ratings and outlook reflect Broadcom's strong financial flexibility and leading positions across a diversified set of end markets, including recurring software revenue accounting for more than 20% of consolidated revenue. Its opportunistic financial policies will support debt-funded acquisitions and capital returns with FCF, constraining positive rating actions absent a public commitment to tighter long-term leverage,” Fitch said in a press release.

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