Gap Inc., the retailer that recaptured an investment-grade credit rating from Standard & Poor’s last week, is handing bondholders returns that are more than double the broader market as profit margins expand to the widest level in two years.
Debt of the owner of Gap, Banana Republic and Old Navy has gained 5 percent this year even as obligations for high-grade retailers from Target Corp. to Macy’s Inc. have lost an average 0.39 percent, according to Bank of America Merrill Lynch index data. The yield on its $1.25 billion of 5.95 percent notes due 2021 fell to 3.31 percent on May 10, the day of the rating action, the lowest level since the securities were sold in 2011.
