COVER 2 filename2.txt [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 2 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. 3 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. 4 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. 5 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. 6 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. 7 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. 8 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. 10