Bloomberg News

Gap Says Investment-Grade Ratings Are Important to Expansion

October 13, 2011

Oct. 13 (Bloomberg) -- Gap Inc.’s investment-grade ratings at Moody’s Investors Service and Fitch Ratings are “very important” as the retailer expands internationally, Chief Financial Officer Sabrina Simmons said.

“It is very important to the company,” Simmons said today in a telephone interview. “As we’re growing globally, it certainly helps to be recognized as an investment-grade credit when we’re trying to acquire real estate.”

The retailer, which issued $1.25 billion of debt in April, is rated Baa3 by Moody’s and BBB- by Fitch, the lowest investment-grade level at both firms. The company is graded BB+, one level below investment grade, by Standard & Poor’s. San Francisco-based Gap is “a very strong story” for bondholders because of its strong free cash flow, Simmons said.

“We’re quite happy with the debt level we have right now so we have no current plans to do any further capital raising,” she said.

--Editor: Kevin Orland

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net; Robin Ajello at rajello@bloomberg.net


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