DBRS gives Home Depot notes A

DBRS said it assigned an A rating with a stable trend to the Home Depot, Inc.’s debt issuance of $1.25 billion 3.125% notes due December 15, 2049, announced on Monday. The rating being assigned is based upon the rating on already-outstanding series of the company’s senior unsecured debt.

The notes are unsecured obligations that rank equally with Home Depot’s unsecured and unsubordinated indebtedness. The company intends to use the proceeds for general corporate purposes, including buying back shares, subject to market conditions and other business considerations.

DBRS notes Home Depot issued an added $750 million 2.9% notes due June 15, 2029, which are exchangeable with, and part of, a single series of senior debt securities with the $1 billion of the 2.95% notes due 2029 issued on June 17, 2019. The outstanding principal amount of the series of notes, after the notes are issued, will be $1.75 billion.

Home Depot’s ratings are supported by its dominant market position, large scale, geographic diversification, and free cash-generating capacity. The ratings also reflect the intense competition and cyclicality of the home improvement retail industry as well as risks related to possible future growth strategies, DBRS said.

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