August 15 , 2011

TD gains the largest Canadian MasterCard holder, becomes dual issuer

TORONTO--TD Bank Group and Bank of America Corporation announced a definitive agreement under which TD will purchase MBNA Canada's credit card portfolio, as well as certain other assets and liabilities. TD will pay a modest premium on an expected $8.5 billion of credit card receivables at closing.

"We are very pleased to be acquiring MBNA Canada's credit card business. This acquisition will position TD as a top card issuer in Canada," said Ed Clark, Group President and CEO, TD Bank Group. "We've consistently said that we will seize good opportunities that make strategic sense, fit within our risk profile and are financially attractive. 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."

MBNA Canada is the country's largest MasterCard issuer. This acquisition will significantly build on TD's existing Canadian credit card business, which has successfully grown to approximately 4 million active accounts. With this transaction, TD will add 1.8 million active accounts to its base.

"This transaction boosts our capability in credit cards and increases our scale in this business, allowing us to further leverage our distribution capabilities," said Tim Hockey, President and CEO, TD Canada Trust. "Acquiring this business makes TD a dual issuer of both Visa and MasterCard, giving customers greater choice."

"TD also has a strong history in the affinity market and this transaction will allow us to increase our presence in this space," added Hockey. "We look forward to working with new affinity partners in credit cards and to welcoming new customers to TD."

Subject to the satisfaction of regulatory approvals and customary closing conditions, this transaction is expected to close in the first quarter of fiscal 2012. The MBNA Canada brand will be maintained at least up to conversion, which is expected to be approximately 18 months from close. Prior to close, TD expects to issue up to 8 million common shares for prudent capital management purposes, subject to tone and price in the market. The common shares are not expected to be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the U.S. absent registration or an applicable exemption from the registration requirements.

TD expects a 20-basis-point impact to its Tier 1 capital ratio on closing, on a pro forma basis as at TD's last quarter end and after the intended common share issuance.

TD expects the transaction to be accretive by 5 cents to adjusted earnings per share in fiscal 2012 and by 10 cents to adjusted earnings per share in fiscal 2013.

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (TD). TD is the sixth largest bank in North America by branches and serves more than 19 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with approximately 7 million online customers. TD had CDN$630 billion in assets on April 30, 2011. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.



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