Moody's: TD Bank deal positive

Moody's Investors Service said that the Toronto-Dominion Bank's (TD) agreement to acquire an $8.5 billion credit card portfolio from MBNA Canada Bank is regarded as credit positive overall.

The acquired assets, after a fair value mark, represent less than 1.5% of TD's consolidated assets in the second quarter of 2011, Moody's said.

TD has a deposit rating of Aaa and an Aa2 long-term scale rating with a negative outlook.

By acquiring this credit card portfolio, TD will generate a number of strategic benefits that will strengthen its already well-positioned Canadian retail franchise, said David Beattie, a Moody's analyst.

The risks associated with increased Canadian consumer credit exposure are manageable, given TD's track record in managing consumer credit risk, the agency added.

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