By Forde, John P.
American Banker , Vol. 150
NEW YORK -- American Express Co. said Thursday that it will use money gained from its recent sale of shares in Fireman's fund Corp. to add $240 million to the capital base of two subsidiaries -- American Express Bank Ltd. and IDS Financial Services Inc.
American Express Bank Ltd., the international banking unit of the diversified financial services firm, will receive $175 million of the $240 million total.
The parent company said in a statement that $100 million of this amount will be an equity contribution and $75 million will be used for a subordinated capital note issued by the bank to American Express, payable in 1992.
The $175 million will raise the bank's yearend total primary capital to approximately $1.3 billion and will increase its primary capital ratio to about 8.5% of assets.
According to the statement, the additional funding will be used primarily to help the international unit find new opportunities to work with Shearson Lehman Brothers Inc. "in developing international capital-markets transactions." Shearson is American Express' wholly owned brokerage and investment banking unit. …