U.S.-based office supplies provider Office Depot Inc. recently entered into a definitive agreement to acquire managed workspace and IT services provider CompuCom Systems Inc. in a leveraged transaction. The purchase consideration of approximately $1 billion is expected to be financed through proceeds from a proposed $750 million term loan issuance, 45 million new Office Depot common shares issuance, and balance sheet cash. We are assigning our 'B' corporate credit rating to Office Depot. At the same time, we are assigning our 'B+' issue-level rating and '2' recovery rating to the proposed $750 million senior secured term loan. The negative outlook reflects the risk that we could lower the rating over the next 12 months if Office Depot's core business experiences
