American Express Repays $3.39B In TARP Funds

STEPHEN BERNARD

NEW YORK (AP) — American Express Co. said Wednesday it repaid the $3.39 billion it received last fall as part of the government's $700 billion bank investment program.

American Express received the money as part of the Treasury Department's Troubled Asset Relief Program to help revive the stagnant credit and lending markets amid one of the worst periods of the credit crisis.

The New York-based credit card lender also paid the Treasury Department $15.1 million of accrued dividends on the investment. American Express had previously paid the government $59.3 million in dividends on the investment.

The government provided banks with capital in exchange for preferred stock and warrants to purchase common shares. The preferred stock carried an interest rate of 5 percent. The investment also included certain restrictions, such as caps on executive compensation that left some banks pushing to repay the loan as quickly as possible.

Wednesday's repayment did not include the repurchase of the warrants. American Express said it plans to notify the Treasury Department of its intent to purchase them. The financial firm issued warrants for the government to purchase about 24.3 million shares of common stock.