NEW YORK--()--American Express (NYSE: AXP) announced today that it has been notified by the United States Department of the Treasury (Treasury Department) that it can repurchase the $3.39 billion of preferred shares that were issued to the Treasury Department as part of the Capital Purchase Program (CPP).
“American Express has met all the requirements of the CPP and we believe that repurchasing our preferred shares at this time is in the best interest of our shareholders as well as good public policy”
“American Express has met all the requirements of the CPP and we believe that repurchasing our preferred shares at this time is in the best interest of our shareholders as well as good public policy,” said Kenneth I. Chenault, chairman and chief executive officer of American Express.
As previously disclosed, American Express has estimated that, upon the repurchase of the preferred shares, the one-time negative impact resulting from an accelerated accretion of the preferred shares will be approximately $0.18 per share for the quarter it is repurchased. The repurchase will be slightly accretive to earnings per common share in subsequent quarters.
In early May, American Express received a final report from the Federal Reserve Board’s Supervisory Capital Assessment Program that there would be “no capital need” under the more adverse economic scenario modeled in the assessment. Subsequently, following guidance from the Federal Reserve Board, in mid-May the Company raised $3.0 billion of long-term funding through issuance of unsecured debt which was not backed by government guarantees. Upon additional guidance from the Federal Reserve Board, in early June the Company raised $500 million equity capital through issuance of common shares as a precondition to repurchasing the preferred shares issued to the Treasury.
American Express Company is a leading global payments and travel company founded in 1850. For more information, visit www.americanexpress.com.
This report includes forward-looking statements, which are subject to risks and uncertainties. Forward-looking statements contain words such as “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to complete the repurchase of the Preferred Shares during the second quarter of 2009 or otherwise thereafter. A further description of these and other risks and uncertainties can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, its Quarterly Report on Form 10-Q for the three months ended March 31, 2009, and the Company’s other reports filed with the SEC.