Target (TGT) to Sell $5.9B Credit Card Portfolio to TD Bank (TD)


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October 23, 2012 8:31 AM EDT Send to a Friend
Target Corporation (NYSE: TGT) announced today that it has reached an agreement to sell its entire consumer credit card portfolio to TD Bank Group (NYSE: TD) for an amount equal to the gross value of the outstanding receivables (“par”) at the time of closing. Target’s portfolio currently has a gross value of approximately $5.9 billion. In addition, the two companies entered into a seven-year program agreement under which TD will underwrite, fund and own future Target Credit Card and Target Visa receivables in the United States. Under the program agreement, TD will control risk management policies and regulatory compliance and Target will continue to perform account servicing functions. This transaction, which is subject to regulatory approval and other customary closing conditions, is expected to close in the first half of calendar 2013.

Under the seven-year program agreement, which applies to Target’s U.S. credit card operations, Target will maintain the current deep integration between its financial services operations and its retail operations. The agreement does not have any impact on Target’s 5% REDcard Rewards program. Target team members will continue to provide all servicing for Target Credit Card and Target Visa accounts. The portfolio sale and program agreement are designed to have minimal impact on Target's current cardholders, guests and the Target team members who support financial products and services.

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