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Moody's might downgraded Broadcom
Moody's Investors Service said it placed the A2 senior debt rating of Broadcom Corp. under review for downgrade following the announcement that Avago Technologies Finance Pte. Ltd. has signed a definitive agreement to acquire Broadcom for $37 billion in Avago shares and cash. Avago plans to fund the acquisition using about $20 billion worth of Avago shares, $9 billion of incremental debt and $8 billion of combined cash balances. Avago has obtained committed financing.
The agency said the review, which could result in a multi-notch downgrade, will focus on the structure and terms of the ultimate financing and the ultimate resolution of the ratings review for Avago. The review will also focus on the pace at which management is committed to reduce debt and the company's leverage targets over the intermediate to longer term.
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