American Express 2007 Annual Report Download - page 94

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN EXPRESS COMPANY
LONG-TERM DEBT
The Company’s long-term debt outstanding, defined as debt with original maturities of one year or greater, at December 31, was
as follows:
(Millions, except percentages) 2007 2006
Maturity
Dates
Outstanding
Balance
Year-End
Stated
Rate on
Debt(a)
Year-End
Effective
Interest
Rate with
Swaps(a)(b)
Outstanding
Balance
Year-End
Stated
Rate on
Debt(a)
Year-End
Effective
Interest
Rate with
Swaps(a)(b)
American Express Company
(Parent Company only)
Fixed and Floating Rate Senior Notes 2009–2033 $ 5,996 5.40% — $ 5,244 5.04% —
Subordinated Debentures(c) 2036 750 6.80% — 750 6.80% —
American Express Travel Related
Services Company, Inc.
Fixed and Floating Rate Senior Notes 2009–2011 2,000 4.93% 4.98% 2,000 4.95% 4.98%
American Express Credit
Corporation
Fixed and Floating Rate Senior Notes 2008–2017 19,118 4.99% 4.98% 19,037 5.10% 5.10%
Borrowings under Bank Credit Facilities 2012 3,146 7.34% 7.09% 2,753 6.69% 6.49%
American Express Centurion Bank
Fixed and Floating Rate Senior Notes 2008–2017 11,099 5.25% 5.14% 7,541 5.33% 5.34%
American Express Bank, FSB
Fixed and Floating Rate Senior Notes 2008–2017 9,909 5.23% 5.13% 4,000 5.38% 5.27%
American Express Receivables
Financing Corporation V LLC
Floating Rate Senior Notes 2010–2012 2,976 5.19% — 1,116 5.38% —
Floating Rate Subordinated Notes 2010–2012 144 5.67% — 84 5.66% —
Other
Fixed and Floating Rate Notes(d) 2008–2014 147 6.53% — 222 6.83% 7.59%
Total $55,285 5.30% $42,747 5.30%
(a) For floating rate debt issuances, the stated and effective interest rates are based on the floating rates in effect at December 31, 2007 and 2006, respectively. These
rates are not indicative of future interest rates.
(b) Effective interest rates are only presented when swaps are in place to hedge the underlying debt at the respective year-end.
(c) The maturity date will automatically be extended to September 1, 2066 except in the case of (1) prior redemption or (2) default related to the debentures.
(d) This balance includes $90 million and $92 million related to a sale-leaseback transaction as of December 31, 2007 and 2006, respectively, as described in Note 14.
As of December 31, 2007, the Parent Company had $750
million principal outstanding of Subordinated Debentures that
accrue interest at an annual rate of 6.80 percent until September
1, 2016 and at an annual rate of three-month LIBOR plus 2.23
percent thereafter. At the Company’s option, the Subordinated
Debentures are redeemable for cash after September 1, 2016 at
100 percent of the principal amount plus any accrued but unpaid
interest. If the Company fails to achieve specified performance
measures, it will be required to issue shares of its common
stock and apply the net proceeds to make interest payments
on the Subordinated Debentures. The Company achieved the
specified performance measures in 2007.
As of December 31, 2007, the Parent Company had $2
billion principal outstanding of unsecured, Floating Rate
Senior Notes due 2033 (the Senior Notes). The Senior Notes
accrue interest at an annual rate of three-month LIBOR plus
11.435 basis points and may be put to the Company at par on
June 5, 2008. Contingent interest payments up to 4 percent are
required if the Senior Notes are not rated at certain levels by
rating agencies. At December 31, 2007, the Company was not
in violation of any of its debt covenants.
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