The Gap Inc.'s proposed $1 billion senior unsecured convertible note issue due in 2009 was rated on Feb. 27, 2002. The ratings on The Gap were also affirmed at that time. The rating on the unsecured debt incorporates the pending $1.3 billion secured bank facility. The $1 billion senior unsecured convertible note offering is part of the company's strategy to assure sufficient liquidity. In addition, the completion of the offering satisfies a condition for the completion of its pending new credit facility. The ratings on the San Francisco, Calif.-based company reflect management's challenge to improve business fundamentals in its three brands in an industry that will continue to experience intense competition, and to improve its weakened credit protection measures. These
