Moody's eyes HD Supply for upgrade

Moody's Investors Service said it placed HD Supply, Inc.'s ratings on review for upgrade, including its Ba1 corporate family rating and the Ba1 rating on HDS' senior secured term loan due 2023 and the Ba2 rating on the company's senior unsecured notes due 2026. The SGL-1 speculative grade liquidity rating is maintained.

The review follows an announcement the A2-rated Home Depot, Inc. agreed to acquire HD Supply for $56 per share, the agency said.

"The Home Depot acquisition of HD Supply will result in HD Supply benefitting from being part of a much larger company with significantly better credit metrics," according to Peter Doyle, a Moody's vice president and senior analyst, in a press release.

Moody's review will consider Home Depot's plans for HDS' debt. “However, Moody's believes that HDS' existing debt will likely be repaid, since Home Depot's cost of capital is much more favorable. Should the debt be repaid, we would withdraw all of HDS' ratings,” the agency said.

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