Citi, Sears To Extend Co-brand And Private Label Credit Card Agreement

(RTTNews) - Citi and Sears Holdings corp. (SHLD) announced the long-term extension of their 15-year co-brand and private label credit card relationship along with long-term marketing arrangements that include ongoing enhancements to the Shop Your Way Mastercard rewards program.

The cardholders will automatically earn more Shop Your Waypoints, including:5% back in points on eligible purchases made at gas stations; 3% back in points on eligible purchases at grocery stores and restaurants; [5% and 3% back on the first $10,000 of combined eligible purchases made annually on gas, groceries and restaurants and 1% thereafter]; 2% back in points on eligible purchases made at Sears and Kmart; and 1% back in points on all other eligible purchases.

In conjunction with the extension of the agreement, Citi will pay Sears $425 million ($400 million of which has been received) upon entry into the amendment, which encompasses a number of program changes.

The shared economics of the program will remain substantially consistent with the existing agreement through December 31, 2020, and will be performance-based thereafter. The amendment removes Sears' right to purchase certain portfolio assets previously included in the program, and for the term of the extension, removes its purchase right to the remaining program assets.

Sears will have the right to purchase remaining program assets in certain circumstances, including at the end of another extension term (if it elects to extend the program and subject to the satisfaction of certain conditions).