American Express 2014 Annual Report Download - page 44

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AMERICAN EXPRESS COMPANY
2014 FINANCIAL REVIEW
TABLE 21: UNSECURED DEBT RATINGS
Credit Agency Entity Rated
Short-Term
Ratings
Long-Term
Ratings Outlook
DBRS All rated entities R-1 A Stable
(middle) (high)
Fitch All rated entities F1 A+ Stable
Moody’s TRS and rated operating subsidiaries(a) Prime-1 A2 Stable
Moody’s American Express Company Prime-2 A3 Stable
S&P TRS and rated operating subsidiaries(a)(b) A-2 A- Stable
S&P American Express Company A-2 BBB+ Stable
(a) American Express Travel Related Services Company, Inc.
(b) S&P does not provide a rating for TRS short-term debt.
Downgrades in the ratings of our unsecured debt or asset securitization program securities could result in higher funding costs, as well as
higher fees related to borrowings under our unused lines of credit. Declines in credit ratings could also reduce our borrowing capacity in the
unsecured debt and asset securitization capital markets. We believe our funding mix, including the proportion of U.S. retail deposits insured
by the Federal Deposit Insurance Corporation (FDIC), should reduce the impact that credit rating downgrades would have on our funding
capacity and costs.
SHORT-TERM FUNDING PROGRAMS
Short-term borrowings, such as commercial paper, are defined as any debt with an original maturity of 12 months or less, as well as interest-
bearing overdrafts with banks. Our short-term funding programs are used primarily to meet working capital needs, such as managing
seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on our funding strategy,
our needs and market conditions.
We had the following short-term borrowings outstanding as of December 31:
TABLE 22: SHORT-TERM BORROWINGS OUTSTANDING
(Billions) 2014 2013
Commercial paper(a) $0.8$0.2
Other short-term borrowings 2.7 4.8
Total $3.5$5.0
(a) Average commercial paper outstanding was $0.2 billion and $0.1 billion in 2014 and 2013, respectively.
Refer to Note 9 to the Consolidated Financial Statements for further description of these borrowings.
DEPOSIT PROGRAMS
We offer deposits within our American Express Centurion Bank (Centurion Bank) and American Express Bank, FSB (FSB) subsidiaries
(together, the Banks). These funds are currently insured up to $250,000 per account holder through the FDIC. Our ability to obtain deposit
funding and offer competitive interest rates is dependent on the Banks’ capital levels. We, through the FSB, have a direct retail deposit
program, Personal Savings from American Express, to supplement our distribution of deposit products sourced through third-party
distribution channels. The direct retail program makes FDIC-insured certificates of deposit (CDs) and high-yield savings account products
available directly to consumers.
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