Federated Department Stores, the largest operator of department stores in the US, has completed the first of two transactions in its planned sale of May Company credit card receivables to Citigroup.
The transaction includes that portion of the May Company portfolio – about 40% of the total – for which systems have been converted. The sale yielded total pre-tax proceeds of $803 million, as well as a gain of approximately $13 million.
The gain on sales of credit card receivables continues to be excluded from Federated’s earnings per share guidance.
The second transaction, planned for late July or August after the requisite systems conversions, will cover the remainder of the May Company portfolio, with pre-tax proceeds estimated at between $1.075 billion and $1.125 billion.
At that time, Federated will have completed the sale of all Federated and May Company customer credit receivables, which in total will have produced after-tax proceeds of approximately $4.6 billion.