Company Also Announces Plan to Retire 2008 Financing from Chase
Card Services
MINNEAPOLIS--(BUSINESS WIRE)--Jan. 18, 2012--
Target Corporation (NYSE: TGT) today announced that it has temporarily
suspended its efforts to sell its credit card receivables portfolio.
Target remains committed to selling the portfolio on appropriate terms,
but based on discussions with potential partners the company has
determined that it is not in its best interests to finalize a
transaction at this time. Later in 2012, the company expects to
re-engage in discussions with a limited number of potential partners,
and expects to be well-positioned to streamline those conversations
based on the groundwork established in its 2011 efforts.
Target also announced today that it intends to retire the 2008
receivables financing provided by Chase Card Services, a subsidiary of
JPMorgan Chase. In 2011, Chase provided Target an option to retire this
financing, and this option expires at the end of January, 2012. Retiring
this financing, prior to its expected payoff in late 2013, will allow
Target to market the portfolio when the company resumes partner
discussions later in 2012. Target will pay Chase approximately $2.8
billion to retire this financing, along with a make-whole premium that
will reduce fourth quarter 2011 earnings per share by approximately 8
cents. Target anticipates it will recoup some or all of the cost of this
premium through lower expected interest expense in 2012 and 2013.
“Our desire to sell the portfolio on appropriate terms remains the same
today as it was when discussions began, but we believe that now is not
the time to finalize a transaction,” said Doug Scovanner, EVP and chief
financial officer of Target Corporation. “We believe a pause in
discussions until later in 2012, combined with repayment of the Chase
Card Services financing, will enable Target to reach an agreement with a
high-quality financial partner on acceptable terms.”
In January 2011, Target announced that it intended to actively pursue a
sale of its credit card receivables portfolio, and that if an
appropriate transaction were to occur it would likely be achieved late
in 2011 or early in 2012. The company now believes a transaction could
occur in late 2012 or early 2013, about a year later than originally
expected.
Forward-Looking Statements
Statements in this release regarding expected interest expense, debt
repayment and potential timing and terms for a credit-card receivables
sale are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements speak only as
of the date they are made and are subject to risks and
uncertainties which could cause the company's actual results to differ
materially. The most important risks and uncertainties are described
in Item 1A of the company's Form 10-K for the fiscal year ended January
29, 2011.
About Target
Minneapolis-based Target Corporation (NYSE:TGT) serves guests at 1,767
stores across the United States and at Target.com. The company plans to
open its first stores in Canada in 2013. In addition, the company
operates a credit card segment that offers branded proprietary credit
card products. Since 1946, Target has given 5 percent of its income
through community grants and programs; today, that giving equals more
than $3 million a week. For more information about Target’s commitment
to corporate responsibility, visit Target.com/hereforgood.
For more information, visit Target.com/Pressroom.
Source: Target Corporation
Target Corporation
Investors
John Hulbert, 612-761-6627
or
Financial
Media
Eric Hausman, 612-761-2054
or
Target Media Hotline,
612-696-3400
