08/15/2011 08:16 EDT | Updated 10/15/2011 05:12 EDT

TD Bank Buys Canadian Credit Card Business From Bank Of America

AP File

TORONTO - TD Bank is boosting its stake in Canadian consumer debt with an agreement to buy the Canadian credit card business of Bank of America Corp., which has about $8.5 billion in receivables.

While TD did not disclose the value of the transaction, it said the price was a "modest premium" on the value.

The assets are part of the MBNA credit card portfolio which was acquired by Bank of America in 2006. MBNA is Canada's largest Mastercard issuer.

"This acquisition will position TD as a top card issuer in Canada," said TD president and CEO Ed Clark.

"This franchise brings new customers to TD, provides attractive additional options for our customers and is a great complement to our existing high-growth credit card business."

TD Bank said the agreement is expected to close in the fiscal first quarter of 2012.

Bank of America has been reworking its credit card division to exit several international divisions, and last month sold its credit card assets in Spain, and also recently exited the same business in the U.K.

"Our strategy is clear: We have been transforming the company to deliver the franchise to our core customer groups, and building a fortress balance sheet behind that," said Bank of America CEO Brian Moynihan.

"While the credit card remains a fundamental core product for our U.S. customers, an international consumer card business under another brand is not consistent with that strategy."