Target to Sell Some Card Receivables

JPMorgan Chase will buy the receivables for approximately $3.6 billion.
By TSC Staff ,

Target

(TGT) - Get Report

reached a deal to sell nearly half of the principal amount of its credit card receivables to

JPMorgan Chase

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.

The deal will generate cash proceeds of approximately $3.6 billion, Target said, and the transaction should close before the end of May. The interest JPMorgan is buying would represent about 47% of the principal amount of Target's receivables outstanding.

"This unique agreement accomplishes the goals set forth in the review of receivables ownership that we initiated on September 12, 2007," said Doug Scovanner, Executive Vice President and Chief Financial Officer of Target, in a press release Monday. "It provides significant liquidity to Target from a single source unrelated to debt capital markets, provides an appropriate sharing of the portfolio benefits and risks between Target and JPMorgan Chase, and allows our guests to continue to benefit from the creativity and expertise of the world-class team at Target Financial Services."

Target ended the session down 1.3% at $53.19. After the close it gained 42 cents. Competitor

Wal-Mart

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slipped 0.9%, while

Costco

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edged up 0.4%.

This article was written by a staff member of TheStreet.com.

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