Moody's rates Broadcom notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to Broadcom Inc.'s new senior notes due 2035 and senior notes due 2036.

Broadcom plans to exchange up to $5 billion of new notes for a similar principal amount of certain tranches of senior notes issued by either Broadcom or CA, Inc., and those senior notes co-issued by Broadcom Technologies Inc. (BTI) and Broadcom Corp. These notes have maturities ranging from January 2025 to November 2030. Broadcom will use its cash balances to fund any premium payments on the notes that are tendered under the exchange offer.

“The exchange offer is credit positive for Broadcom on a consolidated basis since it will extend the average maturity of its debt capital structure without adding incremental debt. Moreover, since BTI, Broadcom Corp., and CA, Inc are direct or indirect subsidiaries of Broadcom, the senior notes co-issued by BTI and Broadcom Corp. and those issued by CA, Inc. are structurally senior to Broadcom's debt. Thus, the exchange of New Notes for these senior notes reduces the degree of structural subordination impacting Broadcom's debt,” Moody’s said in a press release.

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