by Joseph Kenny | 05/21/09

In a recent report, American Express Co. made annnouncement that it issued $3 billion in non-guaranteed senior debt. The credit card company joins the ranks of a number of U.S. banks that have taken similar steps in the last few weeks.

According to available figures, the sale would mean a purchase of $1.25 billion of about 7.25% five-year notes and an estimated $1.75 billion of 8.125% of 10-year notes.

The card company has also made known its plans to use the proceeds of the sale for standard corporate purposes. In addition to regular upkeep, the company hopes to use the money to aid its effort to repurchase $3.4 billion in preferred shares that were issued to the Treasury Department as part of TARP.

In reality, TARP funds have become more of a problem than a solution for the financial institutions that initially accepted them as part of government bailout. This change in perspective came after it became clear what type of intervention by federal authorities was permissible. One point of contention revolved around government imposed limits on employee compensation.

Therefore, it was not a surprise when American Express became the first major financial institution to make a formal request to return its portion of the TARP money.

At the same time American Express made its $3 billion debt sale, other major companies like JPMorgan Chase, U.S. Bancorp, Morgan Stanley, and Goldman Sachs have made similar sales of five and ten-year notes. Along with Northern Trust, Bank of American Mellon, and BB&T Corporation, these companies have sold several billion dollars in non-guaranteed debt.

The credit card company's stocks continue to fluctuate as the larger market shifts and readjusts. Trading prices over the course of the previous fifty-two weeks or so have places the prices between $9.71 and $50.25.