TEXT-S&P may still cut Best Buy 'BBB-' rating

Overview
-- U.S. consumer electronics retailer Best Buy's founder and
largest shareholder, Richard Schulze, is exploring various options, including
taking the company private.
-- We believe that Best Buy's credit profile would weaken materially
because such a transaction would add substantial amounts of debt and hinder
cash flow protection.
-- Our 'BBB-' rating on Best Buy currently remains on CreditWatch with
negative implications.
-- The CreditWatch listing reflects the possibility of a multi-notch
downgrade should Mr. Schulze acquire the company in a leveraged buyout, in
addition to our continuing concerns that restructuring plans underscore the
problems that Best Buy is having with its current business model.

Rating Action
On June 27, 2012, Standard & Poor's Ratings Services said that its 'BBB-'
corporate credit rating and other ratings on Best Buy Co. Inc. remain on
CreditWatch with negative implications, where they were originally placed on
April 4, 2012.

Rationale
In our opinion, a meaningfully debt-financed transaction by Richard Schulze,
the company's founder and largest shareholder, would weaken Best Buy's credit
protection metrics considerably from current levels. As of the first quarter
ended May 5, 2012, the company's adjusted total debt to EBITDA was 1.9x and
interest coverage was 6.5x. Depending on the amount of debt to be used in a
hypothetical buyout and our view of a turnaround plan for the company's
operations given changing industry dynamics, we could lower the rating by at
least one whole category. Currently, we view the company's business risk as
"satisfactory" and the financial risk profile as "moderate."

CreditWatch
We aim to resolve the CreditWatch within the next three months, subject to a
proposed transaction, if any. If no transaction occurs within that time frame,
we would expect to resolve the CreditWatch based on the current management
team's business strategy, cost-reduction and growth initiatives to improve the
company's business model, and its implications for our overall assessment of
the company's credit profile. In addition, our analysis will focus on our view
of the secular changes in the industry and Best Buy's ability to adapt its
model to those changes.

Related Criteria And Research
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- Credit FAQ: Knowing The Investors In A Company's Debt And Equity,
April 4, 2006

Ratings List

Ratings Remaining On CreditWatch

Best Buy Co. Inc.
Corporate Credit Rating BBB-/Watch Neg/--
Senior Unsecured BBB-/Watch Neg