NIKE Inc.'s Proposed Senior Unsecured Notes Rated 'AA-'

NEW YORK (S&P Global Ratings) March 25, 2020--S&P Global Ratings today assigned its 'AA-' issue-level rating to NIKE Inc.'s proposed senior unsecured notes issued in five tranches. The notes will rank pari passu with the company's existing senior unsecured notes. NIKE will use the net proceeds from this offering for general corporate purposes. We expect the transaction to be leverage neutral. We calculated leverage at about 0.7x at the quarter ending Feb.29, 2020.
Our rating on NIKE continues to reflect its position as the world's largest seller of athletic footwear and apparel, its significant scale, strong geographic and channel diversification, and solid digital penetration. It also incorporates strong credit measures, solid cash flow generation, and conservative financial policies, and we assume the company will defer sizable share repurchases over the near term in order to preserve liquidity. We believe its credit metrics will deteriorate in the first half of 2020; however, we expect them to remain within the range for the current rating. S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak between June and August, and we are using this assumption in assessing the economic and credit implications. As the situation evolves, we will update our assumptions and estimates accordingly.
Currently, all of our existing ratings on the company, including our 'AA-' long-term issuer credit rating, are unchanged. The outlook is stable.
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