Home Depot Inc.'s Proposed Senior Unsecured Notes Rated 'A'

NEW YORK (S&P Global Ratings) March 26, 2020--S&P Global Ratings today assigned its 'A' issue-level rating to home improvement retailer Home Depot Inc.'s proposed senior unsecured notes. We expect the company to use the proceeds from these notes for general corporate purposes, including to repay debt and shore up its balance sheet amid the coronavirus pandemic. Therefore, we anticipate that Home Depot's liquidity will remain strong given its cash balances and our expectation for continued solid cash flow generation. We also believe the company will maintain leverage consistent with its 2x target ratio as it manages through the pandemic.
We believe Home Depot is better positioned than companies in most other retail subsectors because of its designation as an essential retailer under government guidelines. We expect the company to continue to generate good operating results with positive same-store sales. We think Home Depot will also benefit from its omni-channel capabilities as customers increasingly purchase necessities, including household maintenance products, online during quarantines and shelter-in-place mandates. Still, we expect macroeconomic conditions to weaken this year, thus we will continue to monitor the company's sales and performance trends as well as its ability to manage its credit metrics.
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