S&P rates Home Depot notes BBB+

Standard & Poor's said it assigned a BBB+ issue rating to Home Depot Inc.'s (BBB+/stable/A-2) proposed $500 million senior unsecured notes due 2020 and $500 million senior unsecured notes due 2040.

Proceeds will be used for the replacement of cash funds that were used to repay $1 billion of 4.625% senior notes that matured on Aug. 15, 2010. As a result, the new proposed $1 billion note issuance is leverage-neutral because it effectively replaces the previous $1 billion senior unsecured notes.

Home Depot has a strong business profile as demonstrated by its No. 1 position in the fragmented home improvement industry, partially offsetting its credit metrics, which are weak for the BBB+ rating, the agency said.

Home Depot's current corporate credit rating is based on the assumption that financial policy will result in leverage increasing to around 2.5 times, the agency noted.

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