Chase to pay $3.6 billion for Target receivables
May 6, 2008,
Minneapolis – Upscale discounter Target will get a big cash injection of $3.6 billion by selling about half of its credit card receivables to JPMorgan Chase, in the type of deal it was encouraged to explore by activist shareholder William Ackman last summer.
At closing, which the companies said it expected before the end of May, the bank will obtain some 47% of the Target portfolio of credit card receivables; the payout is based on performance of the portfolio during an initial five-year partnered stewardship.
Target evp and cfo Doug Scovanner said the agreement “provides significant liquidity to Target from a single source unrelated to debt capital markets” and “an appropriate sharing of the portfolio benefits and risks between Target and JPMorgan Chase.”
Target plans to use some of the proceeds to fund a previously announced share buyback program and make capital investments, thereby avoiding having to shop the “term debt capital markets” in the current unfavorable climate.
Related Content By Author
1200 Suppliers are Ready for You at Intertextile Shanghai
Home & Textiles Today eDaily
Most Viewed Articles
See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.