Foot Locker has announced that it is offering $400 million in senior notes due in 2029, priced at 100 percent of the principal amount and bearing annual interest of 4.00 percent. The private offering is scheduled to close on Oct. 5. Indicatively, the relatively high yield would compare with the current inflation rate of around 5 percent in the U.S., in our view. After the new offering, Foot Locker’s debt-to-Ebitda ratio would still be relatively low at a mid-to-high 1x. Moody’s has assigned a Ba2 rating to the new debt offering, while affirming a Ba1 corporate family rating and a stable outlook for the international retail company. Standard & Poor’s has rated the notes as BB+, while affirming a BB+ issuer credit rating. Both agencies praised Foot Locker’s recent acquisition of WSS and Atmos because they will boost its geographical diversification.

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