The two companies have, as part of the deal, entered into a seven-year agreement, under which TD will oversee risk management procedures and regulatory compliance, while Target will continue to consumer credit card accounts. TD will also be required to underwrite, fund and manage future Target credit card and Visa receivables in the U.S., Businessweek reports.
After searching for two years for a buyer, Target announced late last year that it would sell off its entire consumer credit card portfolio to TD.
Target expects a pre-tax gain of nearly $393 million on the sale in the first quarter of the year, as well as a $161 million pre-tax gain it recorded last year. The retailer plans to use 90 percent of the proceeds from the sale to reduce its debt and initiate a share buyback program, according to Businessweek.
Additionally, Target said that Terry Scully, its president of financial and retail services, plans to retire next March. In order to ensure a smooth transition after the deal’s completion, Scully will transition into a strategic advisory role. He will be replaced by Scott Kennedy, a Target employee since 2005 and its current vice president of pay and benefits.