Nordstrom Declares Special Dividend, Completes Sale of Credit-Card Business

By Josh Beckerman 

Nordstrom Inc. shares climbed after hours on Thursday as the company declared a special dividend and said it completed the sale of its credit-card business to Toronto-Dominion Bank for $2.2 billion.

The payout for the special dividend of $4.85 a share will total about $900 million. The retailer also authorized a $1 billion stock-buyback program.

Nordstrom shares were recently up 4.8% to $74.87 in after-hours trading.

The clothing retailer had announced the sale of the business in May. The move allows it to improve its capital efficiency while retaining a close link with customers. Nordstrom will continue to do the account-servicing for the portfolio and to fund and manage its loyalty programs and Nordstrom debit cards.

Toronto-based TD will become the exclusive U.S. issuer of Nordstrom-branded Visa and private-label consumer credit cards to Nordstrom customers.

TD Bank Chief Executive Bharat Masrani said in March that TD was open to buying more assets, possibly in the credit-card market, to fill out its U.S. balance sheet "because we are rich in deposits and not as rich in loans."

In February, TD said it was extending its contract with Target Corp.--a move that ensures TD will remain the exclusive issuer of Target co-branded and private label credit cards in the U.S. until March 2025.

Write to Josh Beckerman at [e-mail]

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(END) Dow Jones Newswires

October 01, 2015 17:37 ET (21:37 GMT)

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