OREANDA-NEWS. A significant change at the top for The Gap, Inc. has sent credit default swap (CDS) spreads for the struggling retailer significantly wider, according to Fitch Solutions in its latest CDS Case Study Snapshot.

Five-year CDS on The Gap have widened 50% over the past week and 94% over the month to price at the widest levels in over three years. After pricing consistently in line with 'BBB' levels over the course of this year, credit protection for The Gap is now pricing in below investment grade territory.

'The Gap's CDS spread widening in recent days likely reflects market concerns stemming from the exit of Old Navy's chief, who had been the driving force behind that brand's turn-around,' said Director Diana Allmendinger.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.