Best Buy Cut to Junk at Standard & Poor’s
The rating was cut one level to BB+, the first level below investment grade, Jayne M. Ross, an analyst for S&P, said today in a statement. The Richfield, Minnesota-based company’s rating remains on watch negative, which means it may be reduced further.
Best Buy founder Richard Schulze, who resigned as chairman in June, today offered to take the electronics retailer private at $24 to $26 a share. Such a transaction would add a “significant amount of debt,” S&P said, without providing a specific amount.
Best Buy’s $650 million of 5.5 percent bonds due in March 2021 rose 2.5 cents to 94 cents on the dollar at 2 p.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The debt, which yields 6.4 percent, has risen from 89.8 cents on July 25.
The company is rated investment grade at Moody’s Investors Service and Fitch Ratings.
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