S&P affirms Staples with negative view

S&P said it affirmed Staples Inc.’s BBB- corporate credit rating and removed them from CreditWatch with negative implications.

The outlook is negative.

Staples and Office Depot intend to terminate their merger agreement following a ruling by a U.S. district court granting the Federal Trade Commission’s request for a preliminary injunction to block the transaction, S&P said.

Along with the commission’s concerns, the agency also said it thinks the sector continues to face a secular decline from use of technology and sharp competition from e-commerce and other large traditional retailers.

The ratings were placed on watch in February after the company announced its plans to acquire Office Depot Inc. in a transaction valued at $4.3 billion.

Staples plans to repay the secured bank term loan it put in place to fund the planned merger, the agency said.

The negative outlook reflects continued challenges for the company’s office-supply retail business that could lead to a downgrade in the next few years, S&P said.

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