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DUFF & PHELPS: AMERICAN EXPRESS COMPANY, AMERICAN EXPRESS CREDIT CORPORATION DEBT RATINGS REAFFIRMED, COMMERCIAL PAPER RATED DUFF 1+

 CHICAGO, July 23 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned Duff 1+ (one plus) ratings to the commercial paper of both America Express Company and subsidiary American Express Credit Corporation. The senior long-term debt ratings of both companies have been reaffirmed at `AA-' (Double-A-Minus).
 The ratings consider an improved balance sheet, the solid profitability of IDS Financial, and prospects for increased cash flow from various operator units; offset by the recently strained results at the Travel Related Services (TRS) unit and the volatility of the investment banking/brokerage activities. Re-engineering efforts at TRS are designed to reduce costs by more than $1 billion by the end of 1994. These efforts have started to improve profitability despite a decline in net revenues. A key challenge for management going forward will be the ability to preserve and enhance the core card business. Strategies are in place to accomplish this, but the results of the program remain to be demonstrated in an increasingly competitive environment. Positively, earlier problems with credit losses within the consumer loan and the Optima credit card portfolios are being reversed and are no longer a negative credit rating factor.
 The balance sheets of parent American Express and subsidiary Shearson Lehman Brothers have been strengthened in the last 1-1/2 years by several transactions that have been completed or are in process. Debt and double leverage of the parent were reduced through proceeds of sale of 78 percent of First Data Corp. in two steps. The sale of the Boston Company and pending sale of the Shearson retail brokerage and asset management businesses to Primerica will enhance the tangible capital ratios of Shearson Lehman Brothers, reducing potential investment requirement of the parent.
 American Express Credit (Credco) is a captive finance subsidiary of TRS. Credco purchases non-interest bearing receivables at a discount (non-recourse) from TRS and interest bearing receivables at face value. The discount applied to the non-interest bearing receivables is determined to provide Credco with a minimum fixed charge coverage of 1.25 times.
 -0- 7/23/93
 /CONTACT: Daryl R. Leehaug, CPA, CFA, of Duff & Phelps Credit Rating Co., 312-368-3124/
 (AXP)


CO: American Express Company; American Express Credit Corporation ST: IN: SU: RTG

MP -- NY041 -- 5106 07/23/93 11:34 EDT
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Publication:PR Newswire
Date:Jul 23, 1993
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