By Cristal Cody
Chicago, July 26 – American Express Co. priced $500 million of 5.625% fixed-to-floating rate subordinated notes due 2034 (A3/BBB/A-), according to an FWP filing about the Tuesday sale.
The initial rate changes to a floating rate for the final year at SOFR plus 193 basis points.
The notes priced at par, or 175 bps above Treasuries.
Price talk had the notes coming in the Treasuries plus 215 bps area, a market source told Prospect News.
The notes may be called during the three-month period before July 28, 2033 or the three-month period before the maturity date.
Barclays, BofA Securities, Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC and Wells Fargo Securities, LLC were the joint bookrunners.
The subordinated notes were part of a larger four-tranche foray into the market by American Express that also included three tranches of senior notes. The total order book for all four tranches was $9.55 billion, the market source said.
Proceeds will be used for general corporate purposes.
The credit card services company is based in New York.
| Issuer: | American Express Co.
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| Amount: | $500 million
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| Issue: | Fixed-to-floating rate subordinated notes
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| Maturity: | July 28, 2034
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| Bookrunners: | Barclays, BofA Securities, Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC and Wells Fargo Securities, LLC
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| Co-managers: | CastleOak Securities, LP, Lloyds Securities Inc., NatWest Markets Securities Inc., Standard Chartered Bank, TD Securities (USA) LLC and U.S. Bancorp Investments, Inc.
|
| Junior co-managers: | Drexel Hamilton, LLC and Siebert Williams Shank & Co., LLC
|
| Trustee: | Bank of New York Mellon
|
| Counsel to issuer: | In-house
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| Counsel to underwriters: | Cleary Gottlieb Steen & Hamilton LLP
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| Coupon: | 5.625% initial rate; converts to SOFR plus 193 bps for final year
|
| Price: | Par
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| Yield: | 5.625%
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| Spread: | Treasuries plus 175 bps
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| Call features: | At par during three months before July 28, 2033; at par during three months before maturity date
|
| Trade date: | July 25
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| Settlement date: | July 28
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| Ratings: | Moody’s: A3
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| S&P: BBB
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| Fitch: A-
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| Distribution: | SEC registered
|
| Price talk: | Treasuries plus 215 bps area
|
| Cusip: | 025816DK2
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