Moody's keeps Broadcom at A2

Moody's Investors Service said it affirmed the A2 long-term rating of Broadcom Corp. following the company's announcement that it agreed to buy NetLogic for $3.3 billion, net of cash assumed and the rollover of NetLogic employee equity into Broadcom equity.

The outlook is stable.

Despite the "very full valuation for NetLogic, Broadcom can accommodate the acquisition within its existing A2 long-term rating given its leading position in several subsegments of the wired and wireless communications semiconductor market, low leverage (adjusted debt to EBITDA of 0.9x) and a strong liquidity profile," said Moody's senior vice president Richard Lane.

Subject to customary regulatory approvals and NetLogic shareholder approval, the transaction is expected to close by mid-2012.

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