The Gap Inc. announced that it will spin off its Old Navy business into a stand-alone, publicly traded company. The spinoff will remove a well performing segment of Gap's overall business and reduce the total revenue base by about half. The legacy Gap's competitive position will weaken, although the prospective capital structure could balance the less diverse business. As a result, we are placing all of our ratings on Gap, including the 'BB+' issuer credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects our view that Gap's announced spinoff of its Old Navy business will weaken its competitive position. We do not have any information regarding Gap's prospective capital structure. The transaction is expected to be completed in
