S&P cuts OfficeMax

Standard & Poor's said that it lowered all of the ratings on OfficeMax Inc., including the corporate credit rating to B- from B.

The outlook is stable.

S&P also lowered the ratings on all of OfficeMax's senior debt to B- from B. The recovery rating on the debt is 4, indicating average (30%-50%) recovery in the event of a payment default or bankruptcy.

The ratings reflect the unfavorable reassessment of OfficeMax's competitive position as demonstrated by its greater-than-expected decline in its already weak profitability, the potential for additional profit pressure if economic conditions worsen, an inability to grow sales despite a moderate employment improvement and its weak credit protection measures, the agency added.

The ratings on OfficeMax also reflect is weak business risk as demonstrated by its modest No. 3 position in the dedicated office product sector and significant competition from the top two office product competitors and numerous other retailers, the agency noted.

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