Gap Inc. Amends $2.2B ABL Credit Facility; Extends Maturity to 2031

What Happened

• On July 17, 2026, Gap Inc. entered into Amendment No. 2 to its Fourth Amended and Restated Revolving Credit Agreement, updating its existing asset‑based revolving credit facility (ABL Credit Facility) with a $2.2 billion maximum availability. The amendment extends the prior July 13, 2027 maturity to July 2031, removes sustainability‑linked pricing adjustments, and implements regulatory/legal updates. The facility continues to support revolving loans (U.S. dollars and alternative currencies) for working capital, capex and general corporate purposes.

Key Details

• Effective amendment date: July 17, 2026; 8‑K filed July 21, 2026.
• Facility size: $2.2 billion total availability; sublimits: $300 million letters of credit, $200 million swingline, $200 million Canadian borrowings.
• Pricing: U.S. dollar loans at SOFR (floor 0) + 125–150 bps depending on availability; alternative base‑rate option with margin 25–50 bps. Undrawn fee: 25 bps per annum.
• Security & covenants: Obligations remain guaranteed by certain U.S. and Canadian subsidiaries and secured by first liens on inventory, specified receivables and related assets; customary covenants and events of default remain in place. The amendment also allows limited “last‑out” term loan additions subject to caps.

Why It Matters

• Liquidity and refinancing risk: Extending the maturity to 2031 lengthens Gap’s committed liquidity runway versus the prior 2027 maturity, reducing near‑term refinancing pressure.
• Cost of capital: The amendment preserves a market‑linked pricing structure (SOFR + spread or base‑rate option), so borrowing costs will track prevailing interest rates and leverage/availability levels.
• Investor impact: The facility supports operating needs (working capital, capex) and remains collateralized with customary covenants—important for creditors and equity holders assessing financial flexibility. Removal of sustainability‑linked pricing removes a financial tie to environmental/social targets.