By Ronda Fears
Nashville, Tenn., Feb. 28 - Gap Inc. sold an upsized $1.2 billion of seven-year convertible notes at par to yield 5.75% with a 30% initial conversion premium. Banc of America Securities, JPMorgan and Salomon Smith Barney were joint lead managers of the Rule 144A deal, which sold at the aggressive end of price talk that had been tightened before pricing to 5.75% to 6.0% yield with a 25% to 30% initial conversion premium. Original guidance put the yield at 6.0% to 6.5% and premium between 22% and 25%.
The San Francisco-based retailer said it plans to use proceeds for general corporate purposes.
Terms of the new deal are:
Issuer: Gap Inc.
Amount: $1.2 billion
Greenshoe: $180 million
Lead Managers: Banc of America Securities, JPMorgan and Salomon Smith Barney
Maturity Date: March 15, 2009
Coupon: 5.75%
Issue Price: par
Yield to Maturity: 5.75%
Conversion Premium: 30%
Conversion Price: $16.12
Conversion Ratio: 62.035
Call: non-callable for three years, then at 102.88
Ratings: Moody's: Ba3
| S&P: BB+
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| Settlement Date: | March 5
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