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  • April 1993 (Revised December 1994)
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American Express TRS Charge-Card Receivables

By: Andre F. Perold and Kuljot Singh
  • Format:Print
  • | Language:English
  • | Pages:21
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Abstract

American Express (TRS) Co. is considering a proposal to securitize a portion of their consumer charge-card receivables portfolio. In the past, they have relied exclusively on a captive finance subsidiary, Credco, to perform this function. The proposed securitization structure has been put forth by Lehman Brothers and relies heavily on the existing structure of credit-card receivables' securitizations. The growing asset-backed securities market presents TRS an opportunity to diversify its sources of funds--however, there are reasons to be cautious. Due to recent downgrades of American Express and Credco debt, the perceived financial weakness of credit-card receivable backed securities issuers, and the proposal's sophisticated securitization structure, TRS is concerned that 1) The market may perceive securitization as a sign of weakness; 2) The securitization may not be cost effective. Therefore, TRS has to decide whether or not to proceed with securitization at this time.

Keywords

Credit Cards; Restructuring; Borrowing and Debt; Financial Management; Financial Strategy; Debt Securities; Travel Industry

Citation

Perold, Andre F., and Kuljot Singh. "American Express TRS Charge-Card Receivables." Harvard Business School Case 293-120, April 1993. (Revised December 1994.)
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About The Author

Andre F. Perold

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Related Work

    • June 1995 (Revised May 1996)
    • Faculty Research

    American Express TRS Charge-Card Receivables and Lehman Brothers and the Securitization of American Express Charge-Card Receivables TN

    By: Andre F. Perold and Wai Lee
Related Work
  • American Express TRS Charge-Card Receivables and Lehman Brothers and the Securitization of American Express Charge-Card Receivables TN By: Andre F. Perold and Wai Lee
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