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Fitch affirms Best Buy
Fitch Ratings said it affirmed Best Buy Co., Inc.'s issuer default rating at BBB+, bank credit facility at BBB+ and convertible subordinated debentures at BBB.
The outlook is stable.
The affirmation follows Best Buy's announcement that it will acquire 50% of Carphone Warehouse Group plc's European and U.S. retail interests for €1.1 billion through the creation of a venture between Best Buy and Carphone Warehouse. The acquisition will be funded through cash on hand, existing bank lines and new borrowing.
For fiscal 2008 ended March 1, the issuer's adjusted debt-to-EBITDAR ratio was 2 times.
Fitch said it expects the company to remain prudent in its financial management.
Ratings reflect Best Buy's leading market position and successful customer-driven operating strategy, which have differentiated the company from its competitors and produced solid operating results, according to the agency.
Ratings also consider intense competition in the consumer electronics sector and vulnerability to changes in technology trends and consumer spending, the agency noted.
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