8-KRegulation FDOther Events

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Dec 23, 2008)

Filed December 23, 2008For Securities:AXP

Summary

On December 23, 2008, American Express Company (AXP) announced it received preliminary approval from the U.S. Department of the Treasury to participate in the Troubled Asset Relief Program (TARP) Capital Purchase Program. This participation involves the sale of approximately $3.39 billion in preferred stock and warrants to the Treasury. This move signifies AXP's engagement with government support during a period of significant financial market stress in late 2008. The preferred stock will carry a dividend rate of 5% annually for the first five years, increasing to 9% thereafter. This transaction, subject to standard closing conditions, provides AXP with capital infusion to navigate the challenging economic environment, aiming to bolster its financial stability and investor confidence.

Key Highlights

  • 1AXP received preliminary approval from the U.S. Department of the Treasury to participate in the TARP Capital Purchase Program.
  • 2The company expects to issue and sell preferred stock and warrants to the Treasury.
  • 3The aggregate purchase price for the preferred stock and warrants is approximately $3.39 billion.
  • 4This capital injection is intended to strengthen AXP's financial position during a period of market stress.
  • 5The preferred stock will pay a 5% annual dividend for the first five years, then 9% thereafter.
  • 6The transaction is subject to standard closing conditions set forth in the Program's investment documentation.

Frequently Asked Questions

The primary purpose is to strengthen American Express's capital base and financial stability by receiving an investment of approximately $3.39 billion from the U.S. Department of the Treasury in the form of preferred stock and warrants, especially during a period of significant financial market uncertainty in late 2008.

The preferred stock will pay dividends at a rate of 5% per annum for the first five years from the issuance date. After the fifth anniversary, the dividend rate will increase to 9% per annum.

Yes, the participation is subject to standard closing conditions outlined in the Treasury's Program investment documentation. It is a preliminary approval, and the transaction needs to be finalized.

The $3.39 billion investment from the Treasury will be comprised of preferred stock and warrants to purchase shares of American Express common stock.