[LETTERHEAD]
February 16, 2006
VIA FACSIMILE & VIA DELIVERY
Max A. Webb, Esquire, Assistant Director
Office of Structured Finance, Transportation and Leisure
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: American Express Receivables Financing Corporation II
American Express Receivables Financing Corporation III LLC
American Express Receivables Financing Corporation IV LLC
American Express Credit Account Master Trust
Response to SEC Comment Letter dated January 18, 2006
File Nos. 333-130508; 01-03
Dear Mr. Webb:
On behalf of American Express Receivables Financing Corporation II
("RFC II"), American Express Receivables Financing Corporation III LLC ("RFC
III") and American Express Receivables Financing Corporation IV LLC ("RFC IV"),
as depositors (the "Depositors") to the American Express Credit Account Master
Trust (the "Trust" or the "Issuing Entity"), this letter responds to your letter
dated January 18, 2006, providing comments to the Registration Statement on Form
S-3 (the "Registration Statement") submitted on December 20, 2005, by the
Depositors and the Issuing Entity. RFC II, RFC III, RFC IV, American Express
Travel Related Services Company, Inc. ("TRS"), as servicer of the Trust,
American Express Centurion Bank ("Centurion"), as sponsor and sole equity owner
of RFC III, and American Express Bank, FSB ("FSB"), as sponsor and sole equity
owner of RFC IV, are collectively referred to herein as "American Express."
For your convenience, each of your comments has been reproduced below,
followed by American Express' response. Enclosed with this letter is Amendment
No. 1 to the Registration Statement on Form S-3 ("Amendment No. 1") dated
February 16, 2006, marked to show all changes to the Registration Statement. All
capitalized terms defined in the prospectus and used in the following responses
without definition, have the meanings specified in Amendment No. 1. Unless
otherwise specified, page numbers refer to pages in Amendment No. 1.
GENERAL
COMMENT 1: IN THE NEXT AMENDMENT, PLEASE INCLUDE, TO THE
EXTENT PRACTICABLE, BRACKETED LANGUAGE
SHOWING BOTH WHERE YOU PLAN TO INCLUDE
INFORMATION IN THE PROSPECTUS SUPPLEMENT AND
WHAT THE SUBSTANCE OF THAT INFORMATION WILL
BE IN TERMS OF COMPLIANCE WITH REGULATION AB.
WE BELIEVE THIS WILL NOT ONLY ENABLE US TO
BETTER REVIEW YOUR SHELF FILING BUT THAT IT
WILL ALSO MAKE IT LESS LIKELY THAT ANY FORM
REQUIRED INFORMATION WILL NOT BE
INADVERTENTLY OMITTED. SEE OUR RELATED
COMMENTS BELOW FOR MORE GUIDANCE.
Response: American Express has revised the prospectus
supplement to include such additional
information in brackets.
COMMENT 2: PLEASE CONFIRM THAT THE DEPOSITOR OR ANY
ISSUING ENTITY PREVIOUSLY ESTABLISHED,
DIRECTLY OR INDIRECTLY, BY THE DEPOSITOR OR
ANY AFFILIATE OF THE DEPOSITOR HAVE BEEN
CURRENT AND TIMELY WITH EXCHANGE ACT
REPORTING DURING THE LAST TWELVE MONTHS WITH
RESPECT TO ASSET-BACKED SECURITIES INVOLVING
THE SAME ASSET CLASS. PLEASE REFER TO GENERAL
INSTRUCTION I.A.4. OF FORM S-3. ALSO, PLEASE
PROVIDE US WITH THE CIK CODES FOR ANY
AFFILIATE OF THE DEPOSITOR THAT HAS OFFERED A
CLASS OF ASSET-BACKED SECURITIES INVOLVING
THE SAME ASSET CLASS AS THIS OFFERING.
Response: American Express confirms that the Issuing
Entity and each Depositor have been current
and timely with Exchange Act reporting during
the last twelve months with respect to
asset-backed securities involving revolving
credit card receivables. No affiliate of` any
Depositor has offered a class of asset-backed
securities involving revolving credit card
receivables, nor has any Depositor
established any other issuing entity other
than the Trust. The relevant CIK codes for
each Depositor and the Issuing Entity are:
Issuing Entity - 1003509
American Express Receivables Financing
Corporation II - 949349
American Express Receivables Financing
Corporation III LLC - 1283434
American Express Receivables Financing
Corporation IV LLC - 1283435
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PROSPECTUS SUPPLEMENT
IMPORTANT NOTICE ABOUT
INFORMATION PRESENTED,
PAGE i
COMMENT 3: WE NOTE THE THIRD PARAGRAPH ON THIS PAGE THAT
IF THE TERMS "VARY BETWEEN THE PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
YOU SHOULD RELY ON INFORMATION IN THIS
PROSPECTUS SUPPLEMENT." THE INFORMATION IN
THE PROSPECTUS SUPPLEMENT SHOULD COMPLEMENT
THE INFORMATION IN THE BASE, BUT SHOULD NOT
"VARY" OR DIFFER. PLEASE REVISE HERE AND ON
PAGE I OF THE BASE PROSPECTUS.
Response: American Express has revised the disclosure
in response to Comment 3.
CREDIT ENHANCEMENT,
PAGE S-3
COMMENT 4: PLEASE INCLUDE A BRACKETED PLACEHOLDER FOR
OTHER POSSIBLE CREDIT ENHANCEMENT DISCLOSURE.
SEE PAGE 65 OF THE BASE PROSPECTUS.
Response: American Express has revised page S-3 of the
prospectus supplement to include such
additional information in brackets.
KEY PARTIES AND
OPERATING DOCUMENTS,
PAGE S-5
COMMENT 5: WE NOTE YOUR DISCLOSURE IN THE BASE
PROSPECTUS ON PAGE 29 THAT AMERICAN EXPRESS
RECEIVABLES FINANCING CORPORATION II DOES NOT
CURRENTLY TRANSFER ASSETS INTO THE ISSUING
ENTITY AND YOU DO NOT EXPECT IT WILL DO SO IN
THE FUTURE. PLEASE REVISE YOUR CHART OR
PROVIDE A FOOTNOTE TO CLARIFY THIS FOR
INVESTORS.
Response: American Express has revised the "Key Parties
and Operating Documents" chart on page S-5 of
the prospectus supplement in response to
Comment 5.
THE TOTAL PORTFOLIO,
PAGE S-16
GENERAL
COMMENT 6: IN AN APPROPRIATE SECTION, PLEASE REVISE TO
PROVIDE DISCLOSURE REGARDING BALANCE
REDUCTIONS GRANTED FOR REFUNDS, RETURNS,
FRAUDULENT CHARGES OR OTHER REASONS. PLEASE
REFER TO ITEM 1111(b)(8)(iv) OF REGULATION
AB.
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Response: Due to the structural features described
below, including the maintenance of the
Transferor Amount above the required level,
American Express respectfully submits that
disclosure regarding balance adjustments
granted for refunds, returns, fraudulent
charges or other reasons is not material to
investors.
There are structural features in the Trust
which insulate investors from the effects of
such adjustments. The Transferor Amount
represents the amount of assets included in
the Trust not securing investors' interests.
American Express has revised the second
paragraph under "The Pooling and Servicing
Agreement Generally--Defaulted Receivables;
Rebates and Fraudulent Charges" on page 65 of
the base prospectus to clarify that, if any
principal receivable is adjusted because of a
rebate, refund, counterclaim, defense, error,
fraudulent charge, counterfeit charge or
return, then the Transferor Amount (and not
the investors' interests) will be reduced by
the amount of such adjustment. Furthermore,
the pooling and servicing agreement governing
the Trust requires that the Transferor Amount
be maintained at a level not less than 7% of
the outstanding invested amount of all series
of asset-backed securities issued by the
Trust. American Express maintains the
Transferor Amount in excess of this
requirement.
American Express maintains the Transferor
Amount through, among other things, additions
of accounts to the Trust. American Express
currently securitizes only part of its total
credit card portfolio through the Trust -
over the last five years (January
2001-September 2005), the amount of credit
card receivables included in the Trust's
portfolio represented, on average, only 78%
of American Express' total credit card
portfolio. Therefore, when American Express
determines to add accounts to the Trust,
whether in its discretion or as required by
the pooling and servicing agreement, it has
access to a large pool of eligible credit
card accounts which it may choose to add to
the Trust.
LOSS AND DELINQUENCY
EXPERIENCE, PAGE S-17
COMMENT 7: PLEASE EXPAND YOUR DISCLOSURE TO PRESENT
HISTORICAL DELINQUENCY AND LOSS INFORMATION
THROUGH THE POINT THAT ASSETS ARE CHARGED OFF
AS UNCOLLECTIBLE PURSUANT TO 1100(b)(1) OF
REGULATION AB. WE NOTE YOUR DISCLOSURE ON
PAGES 27 AND 65 THAT RECEIVABLES ARE
GENERALLY CHARGED OFF 180 DAYS FROM INITIAL
BILLING.
Response: American Express will revise the Registration
Statement at a later date after this comment
is resolved.
COMMENT 8: PLEASE CONFIRM THAT DELINQUENT ASSETS DO NOT
CONSTITUTE 20% OR MORE, AS MEASURED BY DOLLAR
VOLUME, OF THE ASSET POOL AS OF THE
MEASUREMENT DATE. PLEASE REFER TO ELIGIBILITY
REQUIREMENTS ON FORM S-3 SECTION I.B.5.
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Response: In accordance with Form S-3 section I.B.5,
American Express confirms that delinquent
assets will not constitute 20% or more, as
measured by dollar volume, of the asset pool
as of any measurement date.
PAYMENT RATES,
PAGE S-19
COMMENT 9: PLEASE REVISE TO DISCLOSE THE PERCENTAGE OF
FULL-BALANCE AND MINIMUM PAYMENTS MADE.
PLEASE REFER TO ITEM 1111(b)(8)(viii).
Response: American Express has revised page S-20 of the
prospectus supplement to include the
information contemplated by Item
1111(b)(8)(viii) of Regulation AB in response
to Comment 9.
SERVICING
COMPENSATION AND
PAYMENT OF EXPENSES,
PAGE S-40
COMMENT 10: PLEASE INCLUDE A TABLE ITEMIZING ALL FEES AND
EXPENSES TO BE PAID OR PAYABLE OUT OF THE
CASH FLOWS FROM THE POOL ASSETS. REFER TO
ITEM 1113(c). WE SUGGEST SHOWING ITEMS PAID
OUT OF THE SERVICER'S FEE BE SHOWN WITH
FOOTNOTES OR INDENTED OR IN SOME OTHER
FASHION TO PROVIDE A COMPREHENSIVE PICTURE OF
WHERE THE FEES ARE GOING. ALSO, PLEASE ADD
THIS SECTION TO THE TABLE OF CONTENTS.
Response: American Express has provided the requested
table on page S-10 of the prospectus
supplement.
ANNEX I
COMMENT 11: PLEASE REVISE TO CLARIFY THAT THE INFORMATION
IN ANNEX I IS AN INTEGRAL PART OF THE
PROSPECTUS SUPPLEMENT.
Response: American Express has revised Annex I to
indicate that information provided in Annex I
forms an integral part of the prospectus
supplement.
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BASE PROSPECTUS
COVER PAGE
COMMENT 12: PLEASE REVISE YOUR STATEMENT TO ENSURE THAT
IT ACCURATELY REFLECTS THE LANGUAGE UNDER
ITEM 1102(d) OF REGULATION AB. IN THIS
REGARD, PLEASE CLARIFY THAT THE SECURITIES
REPRESENT THE OBLIGATIONS OF THE ISSUING
ENTITY.
Response: Given that the Issuing Entity issues
certificates, and not notes, American Express
believes it is not appropriate to state that
the certificates represent obligations of the
Issuing Entity. American Express believes its
current disclosure, which states that the
certificates represent interests in the
Issuing Entity, is the proper disclosure.
American Express confirms, however, that it
will revise the front covers of the
prospectus supplement and base prospectus for
the American Express Issuance Trust to
provide that the notes issued thereby
represent obligations of that trust.
TRUST ASSETS, PAGE 3
COMMENT 13: PLEASE REFER TO THE SECOND PARAGRAPH. WE NOTE
THAT CERTIFICATEHOLDERS WILL NOT BE NOTIFIED
OF ANY CHANGES TO THE COMPOSITION OF THE
ASSETS IN THE TRUST DUE TO ADDITIONS OR
REMOVALS OF RECEIVABLES. PLEASE NOTE THAT
CHANGES TO THE ASSET POOL THAT HAVE NOT BEEN
PREVIOUSLY REPORTED SHOULD BE DISCLOSED ON
FORM 10-D. REFER TO ITEM 1121(a)(14).
Response: American Express acknowledges the disclosure
requirements of Item 1121(a)(14) of
Regulation AB.
USE OF PROCEEDS,
PAGE 21
COMMENT 14: PLEASE DESCRIBE ANY EXPENSES INCURRED IN
CONNECTION WITH THE SELECTION AND ACQUISITION
OF THE POOL ASSETS PAYABLE FROM OFFERING
PROCEEDS OR OTHER TRANSACTION PARTIES. REFER
TO ITEM 1107(j) OF REGULATION AB.
Response: No expenses incurred in connection with the
selection and acquisition of the pool assets
are payable from offering proceeds.
THE ISSUING ENTITY,
PAGE 21
COMMENT 15: PLEASE REFER TO THE THIRD FULL PARAGRAPH ON
PAGE 22. WE NOTE THAT TRUST ASSETS MAY ALSO
INCLUDE "PARTICIPATION INTERESTS IN
RECEIVABLES." PLEASE NOTE THAT A LOAN
PARTICIPATION THAT IS SECURITIZED WOULD BE
VIEWED AS A SECURITY, THE OFFER AND SALE OF
WHICH, UNLESS EXEMPT, WOULD BE SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. PLEASE CONFIRM THAT YOU WILL COMPLY WITH
THE REQUIREMENTS OF RULES 190 AND 191 OF THE
SECURITIES ACT WITH RESPECT TO LOAN
PARTICIPATIONS. YOU MAY REFER TO SEC RELEASE
33-8518, SECTION III.6.
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Response: American Express confirms that it will comply
with Rules 190 and 191 of the Securities Act
with respect to loan participations.
ISSUER RATE FEES,
PAGE 27
COMMENT 16: WE NOTE THAT ISSUER RATE FEES ARE SIMILAR IN
CONCEPT TO INTERCHANGE FEES. PLEASE DISCLOSE
THE FEE RATE, OR GIVE AN APPROXIMATE RANGE OF
THE FEE RATE.
Response: Under the MasterCard International and VISA
network systems, the interchange fees that
are paid to bank issuers are determined by
MasterCard International and VISA for all
issuers who use the network. These fees are
therefore publicly available. The issuer rate
fees paid by TRS to card issuers that issue
cards accepted on the American Express
network are privately negotiated between each
card issuer and TRS. These rates, including
the rates applicable to Centurion and FSB,
are not publicly available and constitute
competitively sensitive information.
In lieu of providing the rates, American
Express has revised page 27 of the base
prospectus to disclose the range of
percentages that Issuer Rate Fees comprised
of the Trust's total finance charge
collections during the monthly periods in the
most recent calendar year. This information
enables investors to readily evaluate the
impact of Issuer Rate Fees on yield.
THE ACCOUNTS, PAGE 33
COMMENT 17: ITEM 1111(a)(4) REQUIRES DISCLOSURE IN THE
PROSPECTUS OF THE METHOD AND CRITERIA BY
WHICH ASSETS WERE SELECTED FOR THE
TRANSACTION. EITHER REVISE TO DISCLOSE THIS
HERE OR IN THE SUPPLEMENT OR CONFIRM THAT YOU
WILL FILE A FINAL POOLING AND SERVICING
AGREEMENT PRIOR TO EACH TAKEDOWN.
Response: American Express has revised page S-17 of the
prospectus supplement to note that, subject
to eligibility criteria specified in the
receivables purchase agreements and the
pooling and servicing agreement, the account
owners have the discretion to establish the
method and criteria by which accounts are
selected from the total portfolio for
designation to the trust.
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INTEREST, PAGE 40
COMMENT 18: WE NOTE THAT INTEREST RATE ADJUSTMENTS WOULD
BE DETERMINED BY REFERENCE TO ONE OR MORE
INDICES OR BY A REMARKETING FIRM. PLEASE
CONFIRM TO US THAT IN NO EVENTUALITY WILL YOU
USE AN "INDEX" WHICH IS NOT AN INDEX OF
INTEREST RATES FOR DEBT, E.G. A COMMODITIES
OR STOCK INDEX.
Response: American Express confirms that in no
eventuality will American Express use an
"index" for interest rate adjustments that is
not an index of interest rates for interest
rates for debt.
COMMENT 19: FURTHERMORE, PLEASE TELL US WHY A REMARKETING
FIRM WOULD DETERMINE AN INTEREST RATE
ADJUSTMENT.
Response: American Express has revised page 40 of the
base prospectus to delete the reference to
determinations of interest rate adjustments
by remarketing firms.
OUTSOURCING OF
SERVICING, PAGE 54
COMMENT 20: WE NOTE THAT TRS HAS OUTSOURCED CERTAIN OF
ITS SERVICING FUNCTIONS TO AFFILIATED AND
UNAFFILIATED THIRD PARTIES. PLEASE ADD
BRACKETED LANGUAGE TO THE PROSPECTUS
SUPPLEMENT TO INDICATE DISCLOSURE WILL BE
PROVIDED TO THE EXTENT MATERIAL IF THE
SERVICERS MEET THE THRESHOLDS IN ACCORDANCE
WITH ITEM 1108(A)(3) OF REGULATION AB.
Response: American Express has revised page 56 of the
base prospectus to include such bracketed
information.
COMMENT 21: PLEASE CONFIRM THAT YOU WILL FILE A SEPARATE
ASSESSMENT REPORT, ATTESTATION REPORT AND
SERVICER COMPLIANCE STATEMENT IF MULTIPLE
SERVICERS ARE INVOLVED IN THE CURRENT
TRANSACTION, INCLUDING WHEN SPECIFIC
SERVICING FUNCTIONS ARE OUTSOURCED TO THIRD
PARTIES. REFER TO INSTRUCTIONS TO ITEMS 1122
AND 1123 OF REGULATION AB.
Response: American Express confirms that it will file a
separate assessment report, attestation
report and servicer compliance statement in
accordance with Items 1122 and 1123 of
Regulation AB if multiple servicers are
involved in the transaction, including when
specific servicing functions are outsourced
to third parties.
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FUNDING PERIOD,
PAGE 64
COMMENT 22: WE NOTE THAT YOU MAY USE A PREFUNDING PERIOD.
PLEASE CONFIRM THAT ANY PREFUNDING PERIOD
WILL COMPLY WITH ITEM 1101(c)(3)(ii) OF
REGULATION AB, INCLUDING THAT THE PERIOD WILL
NOT EXTEND FOR MORE THAN ONE YEAR FROM THE
DATE OF ISSUANCE AND THAT YOU WILL NOT USE
MORE THAN 50% OF THE PROCEEDS OF THE OFFERING
TO FUND THE ACCOUNT.
Response: American Express confirms that any prefunding
period will comply with Item 1101(c)(3)(ii)
of Regulation AB, including that the period
will not extend for more than one year from
the date of issuance of the asset-backed
certificates. In addition, in accordance with
Item 1101(c)(3)(ii)(A) of Regulation AB
relating to master trusts such as the Issuing
Entity, American Express confirms that the
portion of the proceeds for the related
prefunding account will not involve more than
50% of the aggregate principal balance of the
total asset pool whose cash flows support the
asset-backed certificates.
COMMENT 23: FURTHERMORE, PLEASE REVISE YOUR SUMMARY IN
THE PROSPECTUS SUPPLEMENT TO INCLUDE
BRACKETED LANGUAGE TO DISCLOSE THE
INFORMATION REQUIRED BY ITEM 1103(a)(5)(i),
(ii), (iv), (v) AND (vi), AS APPLICABLE.
Response: American Express has revised page S-10 of the
prospectus supplement to provide the
requested information.
CREDIT ENHANCEMENT,
PAGE 65
COMMENT 24: ADD BRACKETED LANGUAGE TO THE PROSPECTUS
SUPPLEMENT TO CLARIFY THAT YOU WILL PROVIDE
THE FINANCIAL INFORMATION AS OUTLINED IN ITEM
1114(b) IF THE AGGREGATE SIGNIFICANCE
PERCENTAGE IS 10% OR MORE.
Response: American Express has revised page 66 of the
base prospectus to include bracketed language
clarifying that, in accordance with Item
1114(b), American Express will provide
financial information regarding a significant
enhancement provider if such provider is
liable or contingently liable to provide
payments representing 10% or more of the cash
flow supporting any offered class of
asset-backed securities.
COMMENT 25: WE NOTE THAT YOU MAY ENTER INTO INTEREST RATE
OR CURRENCY SWAPS. PROVIDE FOR DISCLOSURE OF
THE DESCRIPTIVE INFORMATION REQUIRED BY ITEM
1115(a) OF REGULATION AB, INCLUDING THE
SIGNIFICANT PERCENTAGE THE INTEREST RATE
REPRESENTS. LIKEWISE, PROVIDE THE FINANCIAL
INFORMATION AS OUTLINED IN ITEM 1115(b) IF
THE SIGNIFICANT PERCENTAGE IS 10% OR MORE.
PROVIDE THE LANGUAGE IN BRACKETS IN THE
PROSPECTUS SUPPLEMENT, IF APPLICABLE.
9
Response: Since its inception, the Trust has not
entered into any interest rate or currency
swaps. American Express has revised page 68
of the prospectus supplement to provide in
brackets the descriptive information required
by Items 1115(a) and 1115(b) of Regulation
AB.
COMMENT 26: PLEASE DELETE THE REFERENCE TO "OTHER
DERIVATIVES SECURITIES AGREEMENTS." IF YOU
WANT TO ADD ADDITIONAL TYPES OF DERIVATIVE
AGREEMENTS, WE SUGGEST DOING SO IN A
POST-EFFECTIVE AMENDMENT WITH FULL DISCLOSURE
OF EACH TYPE. ALTERNATIVELY, REVISE TO
INCLUDE THAT INFORMATION HERE.
Response: American Express has revised page 68 of the
base prospectus to delete the reference to
"other derivatives securities agreements."
COMMENT 27: CONFIRM YOU WILL FILE ANY ENHANCEMENT OR
SUPPORT AGREEMENTS AND AGREEMENTS RELATED TO
THE DERIVATIVE INSTRUMENTS AS EXHIBITS. REFER
TO INSTRUCTION 1 TO ITEM 1114(a) AND ITEM
1115(a)(5), RESPECTIVELY.
Response: American Express confirms that, in the event
American Express uses type of derivatives
agreements, it will file any enhancement or
support agreements and agreements related to
the derivatives instruments as exhibits.
If you have any questions or comments concerning this response, please
do not hesitate to call the undersigned at 212-640-5714, or American Express'
outside counsel, Michael Mitchell of Orrick, Herrington & Sutcliffe LLP at
202-339-8479 or Alan Knoll of Orrick at 212-506-5077.
Sincerely,
Carol V. Schwartz
Group Counsel
cc: Rolaine S. Bancroft, Esq.
Alan M. Knoll, Esq.
Michael H. Mitchell, Esq.
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