Debt

12 Months Ended

Dec. 31, 2015

NOTE 9

Debt

Short-Term Borrowings

The Company’s short-term borrowings outstanding, defined as borrowings with original contractual maturity dates of less than one year, as of December 31 were as follows:

	2015				2014
(Millions, except percentages)	Outstanding Balance		Year-End Stated Rate on Debt	^(a)	Outstanding Balance		Year-End Stated Rate on Debt	^(a)
Commercial paper	$	2,120	0.38	%	$	769	0.29	%
Other short-term borrowings^(b)(c)		2,692	1.11			2,711	0.81
Total	$	4,812	0.79	%	$	3,480	0.69	%

For floating-rate issuances, the stated interest rates are weighted based on the outstanding balances and floating rates in effect as of December 31, 2015 and 2014.
Includes interest-bearing overdrafts with banks of $410 million and $470 million as of December 31, 2015 and 2014, respectively. In addition, balances include a partially drawn secured borrowing facility (maturing on September 15, 2017), certain book overdrafts (i.e., primarily timing differences arising in the ordinary course of business), short-term borrowings from banks, as well as interest-bearing amounts due to merchants in accordance with merchant service agreements. The secured borrowing facility gives the Company the right to sell up to $2.0 billion face amount of eligible certificates issued from the Lending Trust.
The Company paid $6.7 million and $7.0 million in fees to maintain the secured borrowing facility in 2015 and 2014, respectively.

Long-term Debt

The Company’s long-term debt outstanding, defined as debt with original contractual maturity dates of one year or greater, as of December 31 was as follows:

	2015									2014
(Millions, except percentages)	Original Contractual Maturity Dates	Outstanding Balance		^(a)	Year-End Stated Rate on Debt	^(b)	Year-End Effective Interest Rate with Swaps	^(b)(c)	Outstanding Balance		^(a)	Year-End Stated Rate on Debt	^(b)	Year-End Effective Interest Rate with Swaps	^(b)(c)
American Express Company
(Parent Company only)
Fixed Rate Senior Notes	2016-2042	$	7,546		5.15	%	4.25	%	$	7,535		5.15	%	4.20	%
Floating Rate Senior Notes	2018		850		0.97		―			850		0.85		―
Subordinated Notes^(d)	2024-2036		1,347		5.39		4.47			1,350		5.39		4.42
American Express Credit Corporation
Fixed Rate Senior Notes	2016-2020		16,469		2.16		1.28			16,260		2.26		1.22
Floating Rate Senior Notes	2016-2020		5,300		0.98		―			4,400		0.82		―
Borrowings under Bank Credit Facilities	―		―		―		―			3,672		4.25		―
American Express Centurion Bank
Fixed Rate Senior Notes	2017		1,319		5.99		4.75			2,089		4.12		3.32
Floating Rate Senior Notes	2018		125		0.81		―			675		0.68		―
American Express Bank, FSB
Fixed Rate Senior Notes	2017		1,000		6.00		―			999		6.00		―
Floating Rate Senior Notes	2017		300		0.62		―			300		0.46		―
American Express Charge Trust II
Floating Rate Senior Notes	2018		2,200		0.67		―			3,700		0.41		―
Floating Rate Subordinated Notes	2018		87		0.97		―			87		0.80		―
American Express Lending Trust
Fixed Rate Senior Notes	2016-2017		4,000		1.35		―			6,100		1.11		―
Floating Rate Senior Notes	2017-2019		7,025		0.82		―			8,876		0.72		―
Fixed Rate Subordinated Notes	―		―		―		―			300		1.08		―
Floating Rate Subordinated Notes	2017-2019		316		0.97		―			488		0.73		―
Other
Fixed Rate Instruments^(e)	2021-2033		29		5.62		―			143		3.09		―
Floating Rate Borrowings	2016-2019		244		0.66		―	%		247		0.59		―	%
Unamortized Underwriting Fees			(96)							(116)
Total Long-Term Debt		$	48,061		2.44	%			$	57,955		2.34	%

The outstanding balances include (i) unamortized discount and premium, (ii) the impact of movements in exchange rates on foreign currency denominated debt and (iii) the impact of fair value hedge accounting on certain fixed-rate notes that have been swapped to floating rate through the use of interest rate swaps. Under fair value hedge accounting, the outstanding balances on these fixed-rate notes are adjusted to reflect the impact of changes in fair value due to changes in interest rates. Refer to Note 14 for more details on the Company’s treatment of fair value hedges.
For floating-rate issuances, the stated and effective interest rates are weighted based on the outstanding balances and floating rates in effect as of December 31, 2015 and 2014.
Effective interest rates are only presented when swaps are in place to hedge the underlying debt.
For the $750 million of subordinated debentures issued in 2006 and outstanding as of December 31, 2015, the maturity date will automatically be extended to September 1, 2066, except in the case of either (i) a prior redemption or (ii) a default. At the Company’s option, the subordinated debentures are redeemable for cash on or after September 1, 2016, at 100 percent of the principal amounts plus any accrued but unpaid interest.
Includes $29 million and $31 million as of December 31, 2015 and 2014, respectively, related to capitalized lease transactions.

As of December 31, 2015 and 2014, the Company had $750 million principal outstanding of Subordinated Debentures that accrue interest at an annual rate of 6.8 percent until September 1, 2016, and at an annual rate of three-month LIBOR plus 2.23 percent thereafter. As noted above, at the Company’s option, these Subordinated Debentures are redeemable for cash after September 1, 2016 at 100 percent of the principal amount plus any accrued but unpaid interest. The Company currently intends to exercise this redemption option subject to business and market conditions. If the Company fails to achieve specified performance measures, it will be required to issue common shares and apply the net proceeds to make interest payments on these Subordinated Debentures. No dividends on the Company’s common or preferred shares could be paid until such interest payments are made. The Company would fail to meet these specific performance measures if (i) the Company’s tangible common equity is less than 4 percent of total adjusted assets for the most recent quarter or (ii) if the trailing two quarters’ consolidated net income is equal to or less than zero and tangible common equity as of the trigger determination date, and as of the end of the quarter end six months prior, has in each case declined by 10 percent or more from tangible common equity as of the end of the quarter 18 months prior to the trigger determination date. The Company met the specified performance measures in 2015. The Company issued $600 million of 3.6 percent subordinated notes on December 5, 2014 that are senior in right of payment to the outstanding $750 million of Subordinated Debentures.

Aggregate annual maturities on long-term debt obligations (based on contractual maturity or anticipated redemption dates) as of December 31, 2015 were as follows:

(Millions)		2016		2017		2018	2019		2020		Thereafter		Total
American Express Company (Parent Company only)^(a)	$	1,350	$	1,500	$	3,851	$	641	$	―	$	3,147	$	10,489
American Express Credit Corporation		4,931		4,900		3,614		4,150		4,150		―		21,745
American Express Centurion Bank		―		1,300		125		―		―		―		1,425
American Express Bank, FSB		―		1,300		―		―		―		―		1,300
American Express Charge Trust II		―		―		2,287		―		―		―		2,287
American Express Lending Trust		500		6,639		2,885		1,317		―		―		11,341
Other		33		83		124		4		―		29		273
	$	6,814	$	15,722	$	12,886	$	6,112	$	4,150	$	3,176	$	48,860
Unamortized Underwriting Fees														(96)
Unamortized Discount and Premium														(890)
Impacts due to Fair Value Hedge Accounting														187
Total Long-Term Debt													$	48,061

The Company currently intends to exercise its redemption option related to the $750 million of Subordinated Debentures, subject to business and market conditions.

As of December 31, 2015, the Company maintained a bank line of credit of $3.0 billion compared to bank lines of credit of $6.7 billion as of December 31, 2014. Of the total credit lines, $3.0 billion was undrawn as of both December 31, 2015 and 2014. These undrawn amounts support commercial paper borrowings and contingent funding needs. The availability of the credit line is subject to the Company’s compliance with certain financial covenants, principally the maintenance by American Express Credit Corporation (Credco) of a 1.25 ratio of combined earnings and fixed charges, to fixed charges. As of December 31, 2015 and 2014, the Company was not in violation of any of its debt covenants.

Additionally, the Company maintained a 3-year committed, revolving, secured borrowing facility that gives the Company the right to sell up to $3.0 billion face amount of eligible notes issued from the Charge Trust at any time through July 15, 2018. As of December 31, 2015 and 2014, $1.0 billion and $2.5 billion, respectively, were drawn on this facility.

The Company paid $35.1 million and $49.9 million in fees to maintain these lines in 2015 and 2014, respectively. These committed facilities do not contain material adverse change clauses, which might otherwise preclude borrowing under the credit facilities, nor are they dependent on the Company’s credit rating.

The Company paid total interest, primarily related to short- and long-term debt, corresponding interest rate swaps and customer deposits, of $1.6 billion, $1.7 billion and $2.0 billion in 2015, 2014 and 2013, respectively.