Providian to Sell Credit Card Accounts

Providian Financial Corp. disclosed an agreement to sell 1.7 million of the risky credit card accounts that hobbled the once-high-flying company.

The accounts, holding about $2.6billion in unsecured loans, will be turned over to two limited-liability companies formed by Goldman Sachs & Co., Salomon Smith Barney, CardWorks Inc. and CompuCredit Corp., an Atlanta firm that specializes in the high-risk credit card market.

San Francisco-based Providian will retain a $155-million interest in the loan portfolio and has the option to buy a stake of as much as 15% in the limited-liability companies.

Providian expects a $240-million loss on the sale, which is expected to be completed in May.

Providian shares dropped 19cents to close at $7.50 on the New York Stock Exchange.