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Minneapolis -- Target Corp. said Tuesday it will sell its $5.9 billion credit card portfolio to TD Bank Group.
The business will be sold for an amount equal to the gross value of the outstanding receivables at the time of closing, said Target; the portfolio currently has a gross value of about $5.9 billion.
TD Bank also agreed to a seven-year deal to underwrite, fund and own the retailer’s future credit card and Visa receivables in the U.S.
Target said in January 2011 that it planned to sell its credit card business, but delayed those plans at the beginning of 2012. Then, a week ago, Target chairman and CEO Gregg Steinhafel said the company expected to find the right buyer for the business by the end of the year.
“This transaction achieves all of Target’s strategic and financial goals for a portfolio sale,” Steinhafel said in Tuesday’s statement.
The transaction is expected to close in the first half of 2013.