Fitch Ratings revised its outlook on Broadcom Inc.'s ratings to negative from stable after the semiconductor-devices maker announced a $10.7 billion deal to acquire Symantec Corp.'s enterprise-security business.
The rating agency said the revised outlook reflects the uncertainty over Broadcom's deleveraging roadmap as the company is expected to remain acquisitive following the Symantec deal.
"Fitch remains concerned that serial acquisitions could result in total leverage remaining stubbornly above 3.0x," said the rating agency, which warned that Broadcom's leverage metrics were already "at the edge of Fitch's tolerance for investment-grade ratings."
In lowering the outlook, Fitch also cited weakening demand for Broadcom's products and uncertainty over U.S.-China trade relations. Fitch affirmed Broadcom's long- and short-term ratings at BBB-/F3.
Moody's on Aug. 8 placed Broadcom's P-3 short-term rating and Baa3 senior unsecured ratings on review for downgrade following the Symantec deal announcement. Meanwhile, S&P affirmed Broadcom's ratings at BBB- with a stable outlook.
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