Fitch Expects to Rate American Express' Preferred Share Issuance 'BBB-'

NEW YORK--()--Fitch Ratings expects to rate American Express Company's (AXP, rated 'A+/F1' by Fitch) proposed issuance of Noncumulative Preferred Shares series C 'BBB-.'

This preferred issuance follows the issuance of $750 million in Noncumulative Preferred Shares series B in November 2014. The size of the proposed issuance, as well as the dividend rate will be determined at the time of issuance.

KEY RATING DRIVERS - Preferred Shares

AXP's preferred stock rating is five notches below the entity's Viability Rating (VR) of 'a+' in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profile. The preferred stock rating includes two notches for loss severity given these securities deep subordination in the capital structure, and three notches for non-performance given that the coupon of the securities is non-cumulative and fully discretionary.

Fitch has accorded these preferred securities equity credit of 50%, which is in line with its methodology on assessing and rating bank subordinated and hybrid securities.

RATING SENSITIVITIES - Preferred Shares

The preferred stock ratings are directly linked to AXP's VR and would move in tandem with any changes in AXP's credit profile.

Additional information is available on www.fitchratings.com.

Applicable Criteria and Related Research:

--'Assessing and Rating Bank Subordinated and Hybrid Securities Criteria' (January 2014)

--'Global Financial Institutions Rating Criteria' (January 2014);

--'Finance and Leasing Companies Criteria' (December 2012);

--'U.S. Bank HoldCos & OpCos: Evolving Risk Profiles' (March 2014);

--'2015 Outlook: U.S. Finance and Leasing Companies' (November 2014);

--'Nonbank Financial Institution Interest Rate Sensitivity' (January 2014);

--'Fitch Fundamentals Index U.S. (4Q14)' (January 2015);

--'FinCo Deposit Sensitivity to Rising Rates' (January 2014).

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980359

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Contacts

Fitch Ratings
Primary Analyst
Brendan Sheehy, +1-212-908-9138
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Meghan Neenan, CFA, +1-212-908-9121
Senior Director
or
Committee Chairperson
Chris Wolfe, +1-212-908-0771
Managing Director
or
Media Relations
Alyssa Castelli, New York, +1-212-908-0540
alyssa.castelli@fitchratings.com
or
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Brendan Sheehy, +1-212-908-9138
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Meghan Neenan, CFA, +1-212-908-9121
Senior Director
or
Committee Chairperson
Chris Wolfe, +1-212-908-0771
Managing Director
or
Media Relations
Alyssa Castelli, New York, +1-212-908-0540
alyssa.castelli@fitchratings.com
or
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com