Target to Weigh Sale of Credit-Card Assets
Atlanta, Target Corp. said on Wednesday it was considering selling $7 billion in credit-card receivables. The company also said it will re-evaluate its use of debt and pace of share repurchases. The reviews are expected to be completed by the end of the year.
The company said it is one of the 10 largest issuers of credit cards in the United States, and regardless of the ultimate outcome, it expects to maintain its core financial services operation.
“Given our objective to create substantial shareholder value over time, we plan to approach the capital markets to determine whether Target or a financial institution is better suited to own our receivables,” said Doug Scovanner, CFO, Target. “Regardless of whether or not our review results in a receivables sale, we intend to maintain our core financial services operation and remain firmly committed to growing and developing our best-in-class Target Financial Services team.”
Target has hired Goldman Sachs to advise in the reviews.