NEW YORK -- The financial troubles at American Express widened yesterday, as Moody's Investors Service downgraded the rating on about $7 billion in the company's long-term debt. It was the first time in American Express Co.'s history that any of its debt was downgraded by Moody's.
The rating service took the action because of problems in American Express's credit business and because the company faces growing competition.
Though the downgrading will raise some financing costs, the action did not affect the company's short-term debt, which could have hurt American Express' ability to raise money to finance daily operations. But the move will have an impact on confidence in American Express, analysts said, which in many ways depends on its image as a skillfully run company.