Target Corp.'s deal to sell a 47% stake in its credit card receivables to JPMorgan Chase & Co. for $3.6 billion would not bar the retailer from selling the rest of the portfolio to other potential buyers, the company said Tuesday.
Doug Scovanner, Target's chief financial officer, said on a conference call that there are "no restrictions on the remainder of the portfolio."
For now, though, he said the Minneapolis company is focused on working with JPMorgan Chase "to make this deal something that we both want to make last."
The deal was announced Monday and is expected to close this month.
Target would retain control of all underwriting and other credit card management activities. However, a clause in the contract would allow JPMorgan Chase to gain more control of the portfolio if cash flows, as a percentage of the receivables, fall 500 basis points below Target's 2008 forecast — an event that Mr. Scovanner called unlikely.
There has been a modest increase in defaults and writeoffs in Target's card portfolio in recent months, Mr. Scovanner said.
The retailer is increasing some late fees to be more in line with competitors, he said.
Target has "no specific plans" to overhaul its card offerings this year, Mr. Scovanner said.
