Capital One Financial plans to start issuing credit cards for the outdoor equipment chain Cabela's under a deal connected with the retailer's expected sale to Bass Pro Shops.
Capital One announced a 10-year exclusive agreement Monday to issue cobranded credit cards to customers of Cabela's, which operates 75 U.S. stores.
Under the deal, Capital One will also purchase the Cabela's credit card operation, which includes roughly $5.2 billion in credit card receivables and $5 billion in associated funding liabilities, Capital One said in a press release.
Cabela's Club credit cards are currently issued by the $5.6 billion-asset World's Foremost Bank, a subsidiary of Cabela's.
Capital One declined to disclose the financial terms of the agreement. A Cabela's representative for Cabela's, of Sidney, Neb., told American Banker that details of the deal will be announced at a later date.
The credit card deal was announced Monday in tandem with the announcement that Bass Pro Shops, of Springfield, Mo., had agreed to buy Cabela's for $5.5 billion.
Capital One, of McLean, Va., said that it expects its own transaction to close in the first half of 2017, subject to the concurrent closing of Bass Pro Shops' acquisition, regulatory approval and other conditions.
Evercore ISI, an investment banking advisory firm, said in a note to clients that the Cabela's deal is consistent with Capital One's strategy to expand its private-label credit card business and that it should be modestly accretive to the firm's earnings.
Over the last three years, Capital One has generally been quiet in the store-branded credit card business. In 2013, the firm agreed to sell a $7 billion portfolio of Best Buy cards to Citigroup, less than a year after buying them from HSBC.