NEW YORK — Moody’s Investors Service on Friday assigned a speculative grade, or junk, liquidity rating of "SGL-2" to Gap Inc. reflecting its expectation that existing cash balances of nearly $2.5 billion as of the third quarter ended Nov. 2 will be sufficient over the next 12 to 18 months to fund capital expenditures, seasonal working capital needs and debt service.

The rating also reflects the fact that the company’s committed bank agreement is heavily used as backup for trade letters of credit, and its assets are encumbered.

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