The Gap Inc.'s Proposed Senior Unsecured Notes Rated 'BB' (Recovery Rating: '3')

SAN FRANCISCO (S&P Global Ratings) Sept. 13, 2021--S&P Global Ratings today assigned its 'BB' issue-level rating and '3' recovery rating to San Francisco-based The Gap Inc.'s proposed $1.5 billion senior unsecured notes issued in two tranches. The '3' recovery rating reflects our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of default. The company plans to use the net proceeds, along with cash on hand, to fund a tender offer launched today for its $2.25 billion outstanding senior secured notes due 2023-2027. We view the transaction positively since we expect it will reduce Gap's funded debt levels, lower interest expense, and extend the company's debt maturity profile. All of our other ratings on Gap Inc. are unchanged.

...September 13, 2021 SAN FRANCISCO (S&P Global Ratings) Sept. 13, 2021--S&P Global Ratings today assigned its '##' issue-level rating and '3' recovery rating to San Francisco-based The Gap Inc.'s proposed $1.5 billion senior unsecured notes issued in two tranches. The '3' recovery rating reflects our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of default. The company plans to use the net proceeds, along with cash on hand, to fund a tender offer launched today for its $2.25 billion outstanding senior secured notes due 2023-2027. We view the transaction positively since we expect it will reduce Gap's funded debt levels, lower interest expense, and extend the company's debt maturity profile. All of our other ratings on Gap Inc. are unchanged. For the issuer credit rating rationale on Gap Inc., please reference the research update published Sept. 1, 2021. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors - Our recovery analysis for Gap Inc. simulates...

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