Moody's may lower Office Depot

Moody's Investors Service said it placed the Baa3 senior unsecured rating of Office Depot, Inc. on review for downgrade.

The review results from continued softness in Office Depot's operating performance during early 2008, with the company announcing that the negative trends were continuing and deepening in the second quarter, according to the agency.

"Office Depot continues to have difficulty regaining traction in its key California and Florida markets, and there appears to be limited visibility with respect to when these markets will recover," Moody's senior analyst Charlie O'Shea said in a writtene statement.

"In our June 25, 2008 credit opinion, we stated that operating results would have to improve during the balance of 2008 for the Baa3 rating to hold, and the company's announcement indicates that this is unlikely," O'Shea said.

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