American Express 2010 Annual Report Download - page 45

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The Company had the following short-term borrowings
outstanding as of December 31:
(Billions) 2010 2009
Credco commercial paper $ 0.6 $ 1.0
Other short-term borrowings 2.8 1.3
Total $ 3.4 $ 2.3
Refer to Note 10 to the Consolidated Financial Statements for
further description of these borrowings.
The Company’s short-term borrowings as a percentage of total
debt as of December 31 were as follows:
2010 2009
Short-term borrowings as a percentage of total
debt (GAAP basis) 4.9% 4.3%
As of December 31, 2010, the Company had $0.6 billion of
commercial paper outstanding. Average commercial paper
outstanding was $0.9 billion and $2.0 billion in 2010 and
2009, respectively.
American Express Credit Corporation’s (Credco) total
back-up liquidity coverage, which includes its undrawn
committed bank facilities, was in excess of 100 percent of its
net short-term borrowings as of December 31, 2010 and 2009.
The undrawn committed bank credit facilities were $5.7 billion
as of December 31, 2010.
DEPOSIT PROGRAMS
The Company offers deposits within its American Express
Centurion Bank and American Express Bank, FSB
subsidiaries (together, the “Banks”). These funds are currently
insured up to $250,000 per account through the Federal Deposit
Insurance Corporation (FDIC). The Company’s ability to obtain
deposit funding and offer competitive interest rates is dependent
on the Banks’ capital levels. During the second quarter of 2009,
the Company, through FSB, launched a direct deposit-taking
program, Personal Savings from American Express, to
supplement its distribution of deposit products through third-
party distribution channels. This program makes FDIC-insured
certificates of deposit (CDs) and high-yield savings account
products available directly to consumers.
During 2010, within U.S. retail deposits the Company focused
on continuing to grow both the number of accounts and the total
balances outstanding on savings accounts and CDs that were
sourced directly with consumers through Personal Savings from
American Express. These accounts and balances grew during the
year and financed the maturities of CDs issued through third-
party distribution channels.
The Company held the following deposits as of December 31,
2010 and 2009:
(Billions) 2010 2009
U.S. retail deposits:
Savings accounts — Direct $ 7.7 $ 2.0
Certificates of deposit:
(a)
Direct 1.1 0.3
Third party 11.4 14.8
Sweep accounts — Third party 8.9 8.5
Other deposits 0.6 0.7
Total customer deposits $ 29.7 $ 26.3
(a) The average remaining maturity and average rate at issuance on the total
portfolio of U.S. retail CDs, issued through direct and third-party programs,
were 19.2 months and 2.5 percent, respectively.
LONG-TERM DEBT PROGRAMS
During 2010, the Company and its subsidiaries issued debt and
asset securitizations with maturities ranging from 2 to 5 years.
These amounts included approximately $0.9 billion of AAA-
rated lending securitization certificates and $2.4 billion of
unsecured debt across a variety of maturities and markets.
During the year, the Company retained approximately
$0.3 billion of subordinated securities, as the pricing and
yields for these securities were not attractive compared to
other sources of financing available to the Company.
The Company’s 2010 offerings are presented as follows:
(Billions) Amount
American Express Credit Corporation:
Fixed Rate Senior Note (2.75% coupon) $ 2.0
Bank Credit Facilities Borrowings
(a)
0.4
American Express Issuance Trust
(b)
Floating Rate Senior Notes held by Conduit
(c)
2.5
American Express Credit Account Master Trust
(d)
Floating Rate Senior Notes (1-month LIBOR plus 25 basis
points) 0.9
Floating Rate Subordinated Notes (1-month LIBOR plus
102 basis points on average) 0.1
Total $ 5.9
(a) Interest accrues at 1-month Australian Bank Bill Swap Bid rate plus
29 basis points.
(b) Issuances from the Charge Trust do not include $0.2 billion of subordinated
securities retained by American Express during the year.
(c) The Secured Borrowing Capacity section below provides further details
about this issuance.
(d) Issuances from the Lending Trust do not include $0.1 billion of subordinated
securities retained by American Express during the year.
43
AMERICAN EXPRESS COMPANY
2010 FINANCIAL REVIEW