Toronto Dominion Bank (TD Bank) has agreed to buy 50% of the Aeroplan Visa credit card portfolio of Canadian Imperial Bank of Commerce (CIBC).
TD Bank is planning to start issuing its Aeroplan rewards card in January 2014. CIBC will receive a cash payment of C$3bn ($2.9bn) in credit card receivables outstanding and will retain credit card customers who hold other products with CIBC.
CIBC will also receive upon closing, in aggregate $200m in upfront payments from TD Bank and Aimia – the owner of Aeroplan – as well as annual payments from TD of approximately $37.5m per year in each of the 3 years after closing.
Gerald McCaughey, CIBC CEO, said: "CIBC has been an issuer of Aeroplan loyalty credit cards for more than 20 years, and this deal ensures that our clients will continue to have access to the program for the next 10 years."
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