New York, November 08, 2017 -- Moody's Investors Service has affirmed all of the ratings of American
Express Company (Amex) and its rated subsidiaries American Express Bank,
FSB (FSB), American Express Centurion Bank (Centurion), American
Express Travel Related Svcs Co., Inc (TRS), American
Express Credit Corporation (Credit Corp) and American Express Canada Credit
Corp (Credit Corp Canada). Amex is rated A3 for senior unsecured
debt and Prime-2 for commercial paper. All of the subsidiaries
have A2 issuer ratings. The two bank subsidiaries have deposit
ratings of Aa2/stable/Prime-1 and a standalone baseline credit
assessment (BCA) of a2. Amex's rating outlook remains stable.
Affirmations:
..Issuer: American Express Bank, FSB
.... Adjusted Baseline Credit Assessment,
Affirmed a2
.... Baseline Credit Assessment, Affirmed
a2
.... Long term and short term Counterparty
Risk Assessment, Affirmed A1(cr)/P-1(cr)
.... Issuer Rating, Affirmed A2,
stable
.... Long term and short term Deposit Rating,
Affirmed Aa2, stable,P-1
..Issuer: American Express Canada Credit Corp
....Senior Unsecured Regular Bond/Debenture,
Affirmed A2, stable
..Issuer: American Express Centurion Bank
.... Adjusted Baseline Credit Assessment,
Affirmed a2
.... Baseline Credit Assessment, Affirmed
a2
.... Short term Bank Note Program, Affirmed
(P)P-1/P-1
.... Counterparty Risk Assessment long term
and short term, Affirmed A1(cr)/P-1(cr)
.... Issuer Rating, Affirmed A2,
stable
.... Long term and short term Deposit Rating,
Affirmed Aa2, stable,P-1
....Other Short Term, Affirmed (P)P-1
....Senior Unsecured Bank Note Program,
Affirmed (P)A2
....Senior Unsecured Deposit Note/Takedown,
Affirmed Aa2, stable
..Issuer: American Express Company
.... Commercial Paper, Affirmed P-2
.... Issuer Rating, Affirmed A3,
stable
....Senior Unsecured Shelf, Affirmed
(P)A3
....Pref. Shelf Non-cumulative,
Affirmed (P)Baa2
....Pref. Stock Non-cumulative
Preferred Stock, Affirmed Baa2 (hyb)
....Subordinate Regular Bond/Debenture,
Affirmed A3
....Senior Unsecured Conv./Exch.
Bond/Debenture, Affirmed A3, stable
....Senior Unsecured Regular Bond/Debenture,
Affirmed A3, stable
....Subordinate Shelf, Affirmed (P)A3
..Issuer: American Express Credit Corporation
.... Commercial Paper, Affirmed P-1
.... Issuer Rating, Affirmed A2,
stable
....Subordinate MTN, Affirmed (P)A3
....Senior Unsecured local and foreign currency
Medium-Term Note Program, Affirmed (P)A2
....Other Short Term local and foreign currency,
Affirmed (P)P-1
....Senior Unsecured local and foreign currency
Regular Bond/Debenture, Affirmed A2, stable
....Senior Unsecured Shelf, Affirmed
(P)A2
..Issuer: American Express Travel Related Svcs Co.,
Inc
.... Commercial Paper, Affirmed P-1
.... Issuer Rating, Affirmed A2,
stable
Outlook Actions:
..Issuer: American Express Bank, FSB
....Outlook, Remains Stable
..Issuer: American Express Canada Credit Corp
....Outlook, Remains Stable
..Issuer: American Express Centurion Bank
....Outlook, Remains Stable
..Issuer: American Express Company
....Outlook, Remains Stable
..Issuer: American Express Credit Corporation
....Outlook, Remains Stable
..Issuer: American Express Travel Related Svcs Co.,
Inc
....Outlook, Remains Stable
RATINGS RATIONALE
Amex's bank subsidiaries' BCA is a2. This BCA reflects
the company's key fundamental strengths, which include Amex's strong
profitability, leading credit card franchise, global payments
network, high proportion of non-spread income in its revenue
base, and solid capital metrics. The ratings also reflect
the company's below average liquidity and funding profile compared to
similarly rated banks globally as a result of a relatively heavy emphasis
on confidence and performance-sensitive capital markets funding.
The stable rating outlook reflects Amex's strong and sustainable
franchise, its strong profitability, and "best in class"
asset quality compared to credit card peers. While the company
faces a number of headwinds including a very competitive US credit card
market, increasing charge-offs from historic lows,
rising interest rates as the company is liability sensitive, along
with a potential transformation to digital payments, the company
continues to demonstrate its resilience and ability to reinvent itself
and adapt to the evolving competitive landscape.
WHAT COULD MOVE THE RATINGS UP/DOWN
We do not see upward rating movement on the standalone BCA from the current
level given the company's funding structure and potential exposure to
changes in interchange rates from competitive and/or regulatory initiatives.
Downward pressure on the standalone BCA would occur if there was significant
erosion in the firm's liquidity position, material decline in profitability
such that return on average assets dropped below 3.0% or
material deterioration in Amex's credit performance or capital levels.
The principal methodology used in these ratings was Banks published in
September 2017. Please see the Rating Methodologies 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 credit rating action on the support provider and in relation to
each particular credit 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 credit rating action,
and whose ratings may change as a result of this credit 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.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Warren Kornfeld
Senior Vice President
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Ana Arsov
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
