Exhibit 99.5

 

 

Report of Management on Compliance

 

March 15, 2007

 

 

We, as members of management ofTarget National Bank, as servicer, are responsible for complying with theadministration and servicing requirements of Article III, Article IV andSection 8.8 of the Amended and Restated Pooling and Servicing Agreement, datedApril 28, 2000 (as may be amended and supplemented from time to time, the “Poolingand Servicing Agreement”) and the applicable provisions of the Series 2002-1Supplement, dated July 2, 2002, and the Series 2005-1 Supplement, datedNovember 9, 2005 (together, the “Supplements”) to the Target Credit Card MasterTrust as set forth in Exhibit A. We also are responsible for establishing andmaintaining effective internal control over compliance with the administrationand servicing requirements of Article III, Article IV and Section 8.8 of thePooling and Servicing Agreement and the applicable provisions of theSupplements, as set forth in Exhibit A. We have performed an evaluation ofTarget National Bank’s compliance with the requirements of the administrationand servicing requirements of Article III, Article IV and Section 8.8 of thePooling and Servicing Agreement and the applicable provisions of theSupplements as set forth in Exhibit A, as of December 30, 2006 and for thefiscal year then ended. Based on this evaluation, we assert that as of and forthe fiscal year ended December 30, 2006, Target National Bank complied, in allmaterial respects, with the administration and servicing requirements ofArticle III, Article IV and Section 8.8 of the Pooling and Servicing Agreementand the applicable provisions of the Supplements, as set forth in Exhibit A.

 

 
|   | Very truly  yours,               |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | /s/ Terrence  J. Scully          |
|   | Terrence J.  Scully              |
|   | President,  Target National Bank |
|   |                             |
|   |                             |
|   | /s/ Angela  G. Jenks             |
|   | Angela G.  Jenks                 |
|   | Vice  President and Cashier,     |
|   | Target  National Bank            |

 

 

 

 

Exhibit 99.5

 

**Exhibit A**

 

 

**ServicingStandards**

 

Managementof the Bank identified the following standards which are, in management’s opinion,applicable to servicing credit card receivables and consistent with theapplicable provisions of Article III, Article IV and Section 8.8 of the Amendedand Restated Pooling and Servicing Agreement, dated April 28, 2000 (as may beamended and supplemented from time to time, the “Agreement”), as supplementedby the Series 2002-1 Supplement, dated July 2, 2002, and the Series 2005-1Supplement, dated November 9, 2005, to the Target Credit Card Master Trust(together, the “Supplements”).

 

 

**I.****          Finance Charges**

 

1.               Finance charges arecalculated in accordance with the applicable cardholder agreements based oncardholder average daily balances.

 

2.               Financecharges are accurately reflected on the customers’ monthly billing statements.

 

 

**II.****        Investor Accounting and Reporting**

 

1.               The monthlycertificateholders’ statements are prepared and sent to investors or trusteeson a monthly basis.

 

2.               The annual andmonthly certificateholders’ statements reconcile to the servicers’ accountingrecords.

 

3.               The annual and monthlycertificateholders’ statements are mathematically accurate and are prepared inaccordance with the applicable provisions of the Agreement and the Supplements.

 

 

 

Exhibit 99.5

 

**III.****       Accounting**

 

1.     Theservicing entity’s records of individual credit card receivable balances  agrees with, or reconciles to, the records ofdebtors with respect to the unpaid principal balance.

 

 

**IV.****       Write-Offs**

 

1.    Write-offs ofcardholder balances are completed within the applicable Office of theComptroller of the Currency regulations and accounting principles generallyaccepted in the United States.