Best Buy Junk Rating's False Foundation

Updated to include additional data and January Fitch commentary.

NEW YORK (TheStreet) -- Best Buy (BBY) 's junk bond ratings from Standard & Poor's and Fitch appear to have penalized the struggling big box electronics retailer for a takeover deal that never took place.

In the wake of company founder Richard Schulze's failed effort to take Best Buy private, which ended without a bid in late February, many stock analysts are taking the company's declining losses and a commitment to a new pricing strategy as reason to believe the company can survive competition from online retailer Amazon (AMZN) and pressure from the likes of Wal-Mart (WMT) and Costco (COST) .

That's not necessarily the case at Standard & Poor's and Fitch Ratings, however.

The credit ratings agencies seem to have moved on from downgrades of Best Buy's bonds to "junk" status in early August when Schulze unveiled a thin proposal to take the company private for up to $8.8 billion, with little explanation.

As it turns out, S&P now says in a few sentences Best Buy's junk rating has nothing to do with Schulze's buyout plan, meaning the lack of a formal offer is immaterial to the company's current rating.

But the agency's August cut explicitly focused on Best Buy's debt-fueled takeover proposal as cause for the company's move from investment grade to junk.

"The rating action is a result of founder and largest shareholder, Richard Schulze's proposal to acquire the company for a purchase price in the range of $24.00 to $26.00 per share," wrote S&P in its Aug. 6 downgrade of Best Buy from investment grade.

Fitch also referenced Schulze's proposal as a part of its Aug. 6 downgrade of Best Buy to a sub investment grade rating. The ratings agency's analysts cited "the possibility of a leveraging transaction" following Schulze's proposal.