S&P Downgrades Office Depot and Cracker Barrel, Upgrades Dollar General

Chicago Standard & Poor's Ratings Services said Monday it lowered its ratings on Boca Raton, Fla.-based Office Depot Inc., including its corporate credit rating, to 'BB-' from 'BB'.

“The rating change is based on our expectation that deteriorating macroeconomic conditions and the continued slowdown in consumer and corporate spending will lead to further near-term erosion in operating performance within the company's North American Retail Division and Business Solutions Division through the fourth quarter of 2008 and into fiscal 2009,” said Standard & Poor's credit analyst Mark Salierno.

Standard & Poor also revised its outlook on Lebanon, Tenn.-based Cracker Barrel Old Country Store to negative from stable.

“The outlook revision is due to CBRL's weakening operating performance,” said Standard & Poor's credit analyst Jackie E. Oberoi.

In a positive move, Goodlettsville, Tenn.-based Dollar General Corp. was upgraded to positive from stable.

“The outlook revision follows Dollar General's better-than-expected operating results for the third quarter ended Oct. 31, 2008,” said Standard & Poor's credit analyst Ana Lai, “and our expectations that this positive-operating momentum will continue for the remainder of 2008 and into early 2009, resulting in improving cash flow and stronger credit-protection measures.”

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