Target Corporation to Review Ownership Alternatives for Credit Card Receivables; Company Also to Analyze Capital Structure.MINNEAPOLIS -- Target Corporation (NYSE NYSE
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TGT Target Tracker ) announced today that it will review potential ownership alternatives for its credit card receivables, an asset of approximately $7 billion. The company also announced that it will re-evaluate its use of debt in its capital structure and its pace of share repurchases. The company expects to complete these reviews by the end of December.
Target Corporation has more than 100 years of experience in granting, underwriting and servicing credit for our guests. In the past 13 years, Target has built a consistent, highly profitable credit card portfolio and become one of the ten largest issuers of credit cards in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , with products and services strategically integrated into Target's core retail operations. The primary products include the Target Visa Card and Target Credit Card, together known as "REDcards", as well as GiftCards and other financial products. Target guests apply for REDcards exclusively in our stores and online at Target.com.
"Target has dedicated significant effort over many years to create a premier credit card operation with a world-class team, which has allowed us to drive incremental Additional or increased growth, bulk, quantity, number, or value; enlarged.
Incremental cost is additional or increased cost of an item or service apart from its actual cost. sales, deepen our relationship with our guests and reinforce our brand," said Bob Ulrich
Robert J. Ulrich (born 1944) is the chief executive officer and chairman of the Target Corporation, the sixth-largest retailer in the United States. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Target Corporation. "Going forward, we are committed to maintaining the highest brand standards for our financial products and services, continuing to invest in our outstanding financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. team and delivering an exceptional and integrated credit and retail guest experience."
The review of our credit card receivables will be focused on the economics of possible alternatives and will include, but not be limited to, an examination of possible differences in growth rates Growth Rates
The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures.
Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and credit risk exposure between the current direct ownership model and other possible ownership structures, the cost of debt and equity capital to fund our receivables, and current and future liquidity considerations. 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. has been engaged to advise the company in this review.
Doug Scovanner, Chief Financial Officer of Target Corporation, added, "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. Unlike other retail credit card portfolios, Target's receivables portfolio possesses a unique combination of attributes which include strong double-digit growth, a consistently high yield and unprecedented integration with our retail operations. 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."
Concurrent with the review of credit card receivables, the company will also conduct a review of the use of debt in its capital structure and the pace of current and possible future share repurchase activity. Should a sale of any, or all, of the company's credit card receivables occur, this capital structure review will also include an analysis of the appropriate application of proceeds.
"To provide for the substantial ongoing capital reinvestment Reinvestment
Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.
1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. required by Target's core strategy, we remain firmly committed to maintaining Target's strong investment-grade credit ratings, and specifically we will not consider taking any deliberate actions that would jeopardize our current short-term debt Short-term debt
Debt obligations, recorded as current liabilities, requiring payment within the year. ratings. As a result, Target expects to maintain the necessary credit profile to preserve our long-term debt Long-Term Debt
Loans and financial obligations lasting over one year.
For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. ratings within the "A" category," Scovanner said.
For reference, the company's current long-term ratings are A1, A+, and A+ with Moody's, S&P and Fitch, respectively. The company plans to discuss these considerations with the three debt-rating agencies that currently rate Target's short-term and long-term debt.
A pre-recorded message describing information that the company has made available is accessible by calling 612-761-6500. A transcript of this pre-recorded message is also available on our web site at www.target.com/investors. The company will broadly disseminate updates as it deems appropriate.
Target Corporation's operations include large, general merchandise and food discount stores and a fully integrated on-line business through which we offer a fun and convenient shopping experience with thousands of highly differentiated and affordably priced items. The company currently operates 1,537 Target stores in 47 states. Target Corporation news releases are available at www.target.com.