American Express Co., the credit card company most dependent on capital markets for funds, raised $5.5 billion Monday in a sale of U.S. government-backed debt in its first corporate offering in almost four months.
American Express, which had been shut out of the capital markets as other firms crumbled, is the ninth financial company to sell bonds since Nov. 24 under a Federal Deposit Insurance Corp. guarantee program intended to regain investor confidence.
The companies have raised $57 billion through the program.
American Express has been battered by rising delinquencies and higher funding costs.
The New York company became eligible for government assistance in raising funds when it won Federal Reserve approval to become a commercial bank Nov. 11 as frozen credit markets choked off affordable financing.
"It takes a lot of pressure off the refinancing coming up," said Greg Haendel, a portfolio manager at Transamerica Investment Management in Los Angeles.
"It makes refinancing affordable and doable where otherwise they'd have a lot of trouble coming to market, whether it's a good company or a bad company," Haendel said.
American Express last sold corporate bonds in an offering Aug. 15 when the company's American Express Credit Co. unit issued $2 billion of five-year notes.
Separately, Monday, General Dynamics Corp., the largest maker of armored vehicles for the U.S. military, raised $1 billion in an offering of five-year notes to help repay debt used to finance its purchase of Jet Aviation Management.
The Falls Church, Va., company, which also makes Gulfstream business jets, said the 5.25% securities were priced to yield 365 basis points more than Treasuries of similar maturity, according to data compiled by Bloomberg.
A basis point is 0.01 of a percentage point.