S&P rates Office Depot de Mexico notes BB

Standard & Poor's said it assigned its BB global scale corporate credit rating to Office Depot de Mexico, SA de CV.

The agency also assigned its BB issue-level rating to the company's proposed seven-year senior unsecured notes for up to $350 million with a recovery rating of 3.

Office Depot de Mexico's Mexican and Colombian subsidiaries will guarantee the proposed notes.

The outlook on the corporate credit rating is stable.

"The ratings on ODM reflect its favorable profitability and market position in the office supplies segment, a moderate financial policy, our expectations of positive free operating cash flow, and its adequate liquidity," S&P credit analyst Sandra Tinoco said in a news release.

"Somewhat mitigating these factors are the company's geographic concentration mainly in Mexico, its limited product diversification, the intense competition, cyclicality of the office supplies sector, and credit metrics in line with a significant financial risk profile given the expected bond issuance."

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