The ratings on Boca Raton, Fla.-based Office Depot Inc. reflect Standard&Poor's Ratings Services' opinion that the company's business risk profile is "weak" (as our criteria defined the term), largely due to significant competition; demand correlation with white-collar employment; the strong bargaining power of large corporate customers; and low, inconsistent profitability. We think the retail office products sector is particularly susceptible to a recession in the U.S., which Standard&Poor's believes has a 35% chance of occurring in 2012. We consider the company's financial risk profile "highly leveraged" (as our criteria defined the term), and doubt further meaningful credit measure improvement will occur absent a benign economic environment that will provide Office Depot time to reduce its cost
