S&P rates Best Buy notes BBB

Standard & Poor's said it assigned a BBB rating to Best Buy Co. Inc.'s $500 million senior unsecured notes due 2013. The BBB corporate credit rating was affirmed.

The outlook is negative.

Proceeds will be used to help finance the $2.142 billion 50% interest in a joint venture with Carphone Warehouse's European and U.S. retail interests.

Ratings reflect the company's satisfactory business risk profile, good cash flow generation, geographic and product diversification and successful management team, S&P said.

These factors are partially mitigated by the inherent risks of the consumer electronics business, which is cyclical, and the competition Best Buy faces from discount and direct-retail formats in many product categories, the agency noted.

S&P said it expects pro forma leverage to be 2 times, up from 1.6 times in 2007.

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