S&P affirms Office Depot on merger block

S&P said it affirmed Office Depot Inc.’s B- corporate credit rating and removed it from CreditWatch with positive implications.

The ratings were placed on CreditWatch in February when the company announced it entered into an agreement to be acquired by Staples Inc., S&P said.

The proposed merger is expected to be terminated following a court injunction to block the deal as requested by the Federal Trade Commission, the agency said.

The outlook is stable.

The ratings are supported by Office Depot’s smooth integration with Office Max, minimal near-term debt maturities, no maintenance financial covenants and benefits from cost savings, S&P said.

Office Depot participates in the challenging office-supplies retailing industry, which is facing secular demand declines and intense competition, the agency added.

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