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U.S. Treasury grants American Express $3.39B

2008-12-25 20:53:36 (GMT) (Caymanmama.com - Banks & Banking News)

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American Express get US Govt Grant

American Express will receive $3.39 billion in capital injection from the United States Treasury as part of an emergency rescue

Norfolk, Virginia (CaymanMama.com) — The bailouts keep on coming as credit giant American Express announced Tuesday it would receive $3.39 billion in capital injection from the United States Treasury as part of an emergency rescue for the struggling financial sector.

According to the AFP, American Express said the Treasury had provided introductory approval for the company to be able to participate in the departments’s $700 billion Troubled Asset Relief Program Capital Purchase Program.

“American Express expects to issue and sell to the Treasury preferred stock of approximately 3.39 billion dollars and warrants to purchase shares of common stock for up to 15 percent of that amount,” the company said.

The favored shares will pay dividends at a five percent annual rate for the initial five years and then nine percent each year thereafter, a company statement said.

The United States Federal Reserve granted the American Express’ application to become a bank holding company submitted in November.



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