A rating was assigned on April 23, 2002, to The Gap Inc.'s $1.4 billion senior secured credit facility that matures on March 6, 2004. The other ratings on The Gap were also affirmed at that time. The Gap's revolving credit facility is rated one notch higher than the corporate credit rating because the assets securing the revolver should provide adequate protection to lenders. The facility is secured by the company's cash, merchandise inventory, and trademarks. Standard & Poor's analyzed The Gap's enterprise value under a distressed scenario in which its cash flows were severely discounted. Under this default scenario, collateral value is expected to be more than sufficient to fully cover the credit facility. Financial covenants include a fixed-charge coverage
