Summary
American Express Company (AXP) filed an 8-K on August 1, 2006, to report the issuance of $750 million in aggregate principal amount of 6.80% Subordinated Debentures due September 1, 2036, with an automatic extension option to September 1, 2066. This offering was conducted under an existing shelf registration statement and was made through a Terms Agreement with Citigroup Global Markets Inc. and Goldman, Sachs & Co. acting as underwriters. This issuance represents a significant debt financing event for American Express, indicating a strategy to raise capital through long-term debt. Investors should note the fixed 6.80% interest rate on these subordinated debentures, which carry a maturity of 30 years with a potential extension to 60 years. The sale was executed at a price of $987.06 per security, implying a slight discount to par value received by the company from the underwriters.
Key Highlights
- 1Issuance of $750 million in 6.80% Subordinated Debentures.
- 2Debentures mature on September 1, 2036, with an automatic extension option to September 1, 2066.
- 3Debt offering was conducted under an existing Form S-3 shelf registration.
- 4Citigroup Global Markets Inc. and Goldman, Sachs & Co. acted as underwriters.
- 5The issuance was priced at $987.06 per security, indicating a nominal discount to the face value.
- 6The debentures are subordinated in the company's capital structure.
- 7The filing includes exhibits of the First Supplemental Indenture and forms of the debentures.