Moody's upgrades outlook on OfficeMax to stable from negative, affirms retailer's B1 corporate family and probability of default ratings, says company's 'worst days are behind it'

NEW YORK , December 5, 2011 () – Moody's Investors Service on Friday changed its outlook on OfficeMax Inc. to "stable" from "negative" and affirmed the retailer's "B1" corporate family and probability of default ratings, and said the company's "worst days are behind it."

"B1" is considered a non-investment grade, or "junk" level rating.

The ratings agency said the change in outlook to stable reflects its belief that the Naperville, Ill.-based chain's operating performance is likely to improve under management's new strategic plan.

The short-term positive impact on the company's credit metrics, however, is likely to be modest, it said.

Moody's Senior Analyst Charlie O'Shea said the outlook change reflects the firm's belief that, absent a double-dip recession, OfficeMax will be likely be able to solidify its B1 positioning.

The agency said OfficeMax ratings could be upgraded if its operating performance improves significantly. If the company is unable to continue to improve its credit profit, it could see a downgrade.

OfficeMax is the third-largest office supplies retailer in the country.

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