Fitch: Target's Ratings on Watch Negative after Credit Card & Capital Structure Review.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has placed the following Target Corporation (Target) ratings on Rating Watch Negative: --Long-term IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 'A+'; --Short-term IDR 'F1'; --Bank credit facility 'A+'; --Senior notes 'A+'; --Commercial paper 'F1'; These actions follow the company's announcement that it will review ownership alternatives for its credit card receivables as well as re-evaluate its use of debt in its capital structure and its pace of current and future share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . Target has retained Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. as its advisor and expects to complete these reviews by the end of December 2007. Fitch expects to resolve the Rating Watch Negative as the company completes its reviews and as more details are disclosed. Fitch acknowledges Target's commitment to maintaining strong investment-grade credit ratings. Fitch currently anticipates that following these reviews, it will likely affirm the short-term Issuer Default Rating (IDR) and either affirm or lower the long-term IDR by one notch. Fitch views these actions as a possible shift in its financial strategy. Of importance in resolving the Rating Watch Negative will be the amount and use of proceeds from a sale of the credit card receivables portfolio, the terms of any on-going agreement between Target and the potential acquirer and the changes in the company's capital structure. The ratings on Target continue to reflect the company's successful business strategy of offering high-quality fashionable merchandise at affordable prices, which has produced continued strong operating results and credit metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. . The ratings also consider Target's high percentage of real estate ownership balanced by intense competition in the discounter segment and potential pressure on its customers due to high energy costs. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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