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Moody's affirms ratings of American Express, outlook is stable
Aug 15, 2013

New York, August 12th 2013 - Moody's Investors Service affirmed all ratings for American Express Company (Amex) and its subsidiaries (parent company at A3/Prime-2, subsidiaries at A2/Prime-1) and maintained the outlook at stable.

RATINGS RATIONALE

The ratings reflect the strength of the American Express brand as reflected in strong, sustainable franchises in the company's global payments network and charge card and credit card issuing businesses, strong profitability driven by the high spend and premium economics it generates on its payments network, and solid capital metrics. The ratings also reflect Amex's sound liquidity and funding profile, including a healthy liquidity runway giving it the financial flexibility to deal with a sustained lack of access to incremental capital markets (unsecured debt and term ABS) and deposit funding.

Balancing these credit strengths, Amex has a relatively heavy emphasis on capital markets funding. Moreover, the company remains sensitive to consumer and corporate spending patterns, in particular those of affluent consumers who comprise a substantial portion of total spending. In addition, Amex remains exposed to significant regulatory, legislative and legal risks, as well as competitive pressures from evolving technologies -- such as the growing digital payments market -- that are transforming the global payments industry. (We note that Amex has made inroads in positioning itself in this space via a variety of initiatives including strategic investments, partnerships and new product introductions, and the hiring of key executives from the technology industry.)

American Express Company is a New York-based bank holding company that is comprised of a group of operating and financing subsidiaries thatoperates in the global payment services, charge card, credit card and travel services industries. As of June 30, 2013 Amex reported total assets of $152 billion and shareholders equity of $19 billion.

The principal methodology used in this rating was Global Banks methodology published in May 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

 

Re-disseminated by The Asian Banker

Categories: Results & Ratings
Keywords: American Express, Moody's



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