S&P Cuts American Express Ratings to 'A'

Standard & Poor's cut its rating on American Express by one notch on Friday due to increasing financial pressure on consumer lenders, the rating company said.

S&P cut its ratings for American Express by one step to "A," or five steps above junk, from "A-plus." The outlook is negative, suggesting more cuts may come.

"The actions reflect our concerns about the weakening operating environment for consumer lenders, deterioration in Amex's credit card loan portfolio, and Amex's wholesale funding concentration," S&P said in a statement.

S&P also said the downgrade reflects its reassessment of higher industry risk for financial institutions and greater market volatility.

"The current recessionary operating environment, characterized by rising unemployment, consumer spending contraction, and overall economic weakness, has pressured Amex's 2008 operations" and profits, S&P said.
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