<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-1
AMERICAN EXPRESS INVESTORS CERTIFICATE
POST-EFFECTIVE AMENDMENT NO. 13 TO
REGISTRATION STATEMENT NO. 33-26844
UNDER
THE SECURITIES ACT OF 1933
IDS CERTIFICATE COMPANY
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
6725
(Primary Standard Industrial Classification Code Number)
41-6009975
(I.R.S. Employer Identification No.)
IDS Tower 10, Minneapolis, MN 55440, (612) 671-3131
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Bruce A. Kohn IDS Tower 10, Minneapolis, MN 55440-0010,
(612) 671-2221
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
The Registrant has registered an indefinite number of certificates
under the Securities Act of 1933 pursuant to Section 24-f of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for
its most recent fiscal year (December 31) will be filed on or about
February 28, 1997.
<PAGE>
PAGE 2
American Express Investors Certificate
Prospectus
April 30, 1997
American Express Investors Certificates are issued by IDS
Certificate Company (the Issuer or IDSC). The American Express
Investors Certificate is a security purchased with a single
investment. You may purchase this certificate by selecting a term
of one, two, three, six, 12, 24 or 36 months, and an initial
investment of at least $100,000 but not more than $5 million
(unless you receive prior authorization from the Issuer to invest
more), exclusive of interest. Your principal and interest are
guaranteed by the Issuer. The Issuer guarantees a fixed rate of
interest depending upon the term you select. You may invest in
successive terms up to a total of 20 years from the issue date of
the certificate. Your interest rate will be determined as
described in "About the certificate."
This prospectus describes American Express Investors Certificate
distributed by American Express Financial Advisors Inc. American
Express Bank International (AEBI) has an arrangement with American
Express Financial Advisors Inc. under which the certificate is
offered to AEBI's clients who are neither citizens nor residents of
the United States, and to certain U.S. trusts. The certificate is
currently available through AEBI offices located in Florida and New
York. The certificate is also available to certain clients of
Coutts & Co (USA) International (Coutts) through its office in
California.
As is the case with other investment companies, these securities
have not been approved or disapproved by the securities and
exchange commission or any state securities commission, nor has the
securities and exchange commission or any state securities
commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
This prospectus describes terms and conditions of your American
Express Investors Certificate. It contains facts that can help you
decide if the certificate is the right investment for you. Read
the prospectus before you invest and keep it for future reference.
No one has the authority to change the terms and conditions of the
American Express Investors Certificate as described in the
prospectus, or to bind the Issuer by any statement not in it.
THIS CERTIFICATE IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK OR OTHER ENTITY, AND IS NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
Issuer:
IDS Certificate Company
Unit 557
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 3
Distributor:
American Express Financial Advisors Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
Selling Agents:
American Express Bank International
American Express Tower
World Financial Center
New York, NY 10285-2300
Coutts & Co (USA) International
421 North Rodeo Drive
Penthouse 1
Beverly Hills, CA 90210-4539
<PAGE>
PAGE 4
Where to get information about the Issuer
The Issuer is subject to the reporting requirements of the
Securities Exchange Act of 1934. Reports and other information on
the Issuer are filed with the Securities and Exchange Commission
(SEC). Copies can be obtained from the Public Reference Section of
the SEC, 450 5th St., N.W., Washington, D.C. 20549, at prescribed
rates. Or you can inspect and copy information in person at the
SEC's Public Reference Section and at the following regional
offices:
Northeast Regional Office
7 World Trade Center, Suite 1300
New York, NY 10048
Midwest Regional Office
Northwestern Atrium Center
500 West Madison St. Suite 1400
Chicago, IL 60611
Pacific Regional Office
5670 Wilshire Blvd., 11th Floor
Los Angeles, CA 90036
Initial interest rates
The Issuer guarantees a fixed rate of interest for each term. For
the initial term, the rate will be within a specified range of
certain average interest rates generally referred to as the London
Interbank Offered Rates (LIBOR) as explained under "About the
certificate."
Here are the interest rates in effect on the date of this
prospectus, April 30, 1997*:
Actual
Simple Compound Effective
Interest Yield for Annualized
Term Rate* the Term** Yield***
1 month
2 month
3 month
6 month
12 month
24 month
36 month
* These are the rates for investments of $1 million. Rates may
depend on factors described in "Rates for new purchases" under
"About the certificate."
** Assuming monthly compounding for the number of months in the
term and a $1 million purchase.
*** Assuming monthly compounding for 12 months and a $1 million
purchase.
<PAGE>
PAGE 5
These rates may or may not be in effect when you apply to purchase
your certificate. Rates for future terms are set at the discretion
of the Issuer and may also differ from the rates shown here.
The Issuer reserves the right to issue other securities with
different terms.
<PAGE>
PAGE 6
Contents
Table of contents
About the certificate p
Investment amounts and terms p
Face amount and principal p
Value at maturity p
Receiving cash during the term p
Interest p
Promotions and pricing flexibility p
Rates for new purchases p
Rates for future terms p
Additional investments p
Earning interest p
How to invest and withdraw funds p
Buying your certificate p
Full and partial withdrawals p
When your certificate term ends p
Transfers to other accounts p
Transfer of ownership p
For more information p
Giving instructions and written notification p
Purchases by bank wire p
Tax treatment of your investment
Withholding taxes p
Estate tax p
Trusts p
How your money is used and protected
Invested and guaranteed by the Issuer p
Regulated by government p
Backed by our investments p
Investment policies p
Certain investment considerations p
How your money is managed
Relationship between the Issuer
and American Express Financial Corporation p
Capital structure and certificates issued p
Investment management and services p
Distribution p
About American Express Bank International p
Additional information about
American Express Investors certificate p
Employment of other American Express affiliates p
Directors and officers p
Auditors p
Appendix p
Annual financial information
Summary of selected financial information p
<PAGE>
PAGE 7
Management's discussion and analysis of financial
condition and results of operations p
Report of independent auditors p
Financial statements p
Notes to financial statements p
<PAGE>
PAGE 8
About the certificate
Investment amounts and terms
You may purchase the American Express Investors Certificate with an
initial payment of at least $100,000 payable in U.S. currency.
Unless you receive prior authorization, your total amount paid in
any one or more certificates, in the aggregate over the life of the
certificate, less withdrawals, cannot exceed $5 million.
After determining the amount you wish to invest, you select a term
of one, two, three, six, 12, 24 or 36 months for which the Issuer
will guarantee a specific interest rate. The Issuer guarantees the
principal of your certificate. At the end of the term, you may
have interest earned on the certificate during its term credited to
your certificate or paid to you. Investments in the certificate
may continue for successive terms up to a total of 20 years from
the issue date of the certificate. Generally, you will be able to
select any of the terms offered. But if your certificate is
nearing its 20-year maturity, you will not be allowed to select a
term that would carry the certificate past its maturity date.
Face amount and principal
The face amount of the certificate is the amount of your initial
investment, and will remain the same over the life of the
certificate. Any investment or withdrawal within 15 days of the
end of a term will be added on or deducted to determine principal
for the new term. A withdrawal at any other time is taken first
from interest credited to your investment during that term. The
principal is the amount that is reinvested at the beginning of each
subsequent term, and is calculated as follows:
Principal equals Face Amount (initial investment)
plus At the end of a term, interest credited to your account
during the term
minus Any interest paid to you in cash
plus Any additional investments to your certificate
minus Any withdrawals, fees and applicable penalties
Principal may change during a term as described in "Full and
partial withdrawals."
For example: Assume your initial investment (face amount) of
$500,000 earned $7,500 of interest during the term. You have not
taken any interest as cash or made any withdrawals. You have
invested an additional $250,000 prior to the beginning of the next
term. Your principal for the next term will equal:
<PAGE>
PAGE 9
$500,000 Face amount (initial investment)
plus 7,500 Interest credited to your account
minus (0) Interest paid to you in cash
plus 250,000 Additional investment to your certificate
minus (0) Withdrawals and applicable penalties or fees
$757,500 Principal at the beginning of the next term.
Value at maturity
You may continue to invest for successive terms for up to a total
of 20 years. Your certificate matures at 20 years from its issue
date. At maturity, you will receive a distribution for the value
of your certificate, which will be the total of your purchase
price, plus additional investments and any credited interest not
paid to you in cash, less any withdrawals and penalties. Some fees
may apply as described in "How to invest and withdraw funds."
Receiving cash during the term
If you need your money before your certificate term ends, you may
withdraw part or all of its value at any time, less any penalties
that apply.
Procedures for withdrawing money, as well as conditions under which
penalties apply, are described in "How to invest and withdraw
funds."
Interest
Your investments earn interest from the date they are credited to
your account. Interest is compounded and credited at the end of
each certificate month (on the monthly anniversary of the issue
date). Interest may be paid to you monthly in cash if you maintain
a principal balance of at least $500,000.
The Issuer declares and guarantees a fixed rate of interest for
each term during the life of your certificate. We calculate the
amount of interest you earn each certificate month by:
o applying the interest rate then in effect to your balance each
day,
o adding these daily amounts to get a monthly total, and
o subtracting interest accrued on any amount you withdraw during
the certificate month.
Interest is calculated on a 30-day month and 360-day year basis.
Promotions and pricing flexibility
From time to time, the Issuer may sponsor or participate in
promotions involving one or more of the certificates and their
respective terms. For example, we may offer different rates to new
clients, to existing clients, or to individuals who purchase or use
products or services offered by American Express Bank
International, Coutts & Co. (USA) International or their
affiliates. These promotions will generally be for a specified
period of time. We also may offer different rates based on your
amount invested.
<PAGE>
PAGE 10
Rates for new purchases
When your application is accepted and we have received your initial
investment, we will send you a confirmation of your purchase
showing the rate that your investment will earn. The Issuer
guarantees that the rate in effect for your initial term will be
within a 100 basis point (1%) range tied to certain average
interest rates for comparable length dollar deposits available on
an interbank basis in the London market, and generally referred to
as the London Interbank Offered Rates (LIBOR). For investments of
$1 million or more, initial rates for specific terms are determined
as follows:
1 month Within a range of 80 basis points below to 20 basis
points above the one-month LIBOR rate.
2 months Within a range of 80 basis points below to 20 basis
points above the one-month LIBOR rate. (A two-month
LIBOR rate is not published.)
3 months Within a range of 80 basis points below to 20 basis
points above the three-month LIBOR rate.
6 months Within a range of 80 basis points below to 20 basis
points above the six-month LIBOR rate.
12 months Within a range of 80 basis points below to 20 basis
points above the 12-month LIBOR rate.
24 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 24-month LIBOR
rate is not published.)
36 months Within a range of 50 basis points below to 50 basis
points above the 12-month LIBOR rate. (A 36-month LIBOR
rate is not published.)
For investments from $250,000 to $999,999 initial rates for
specific terms are determined as follows:
1 month Within a range of 100 basis points below to zero basis
points above the one-month LIBOR rate.
2 months Within a range of 100 basis points below to zero basis
points above the one-month LIBOR rate. (A two-month
LIBOR rate is not published.)
3 months Within a range of 100 basis points below to zero basis
points above the three-month LIBOR rate.
6 months Within a range of 100 basis points below to zero basis
points above the six-month LIBOR rate.
12 months Within a range of 100 basis points below to zero basis
points above the 12-month LIBOR rate.
<PAGE>
PAGE 11
24 months Within a range of 70 basis points below to 30 points
above the 12-month LIBOR rate. (A 24-month LIBOR rate is
not published.)
36 months Within a range of 70 basis points below to 30 points
above the 12-month LIBOR rate. (A 36-month LIBOR rate is
not published.)
For investments of $100,000 to $249,999, initial rates for specific
terms are determined as follows:
1 month Within a range of 175 basis points below to 75 basis
points below the one-month LIBOR rate.
2 months Within a range of 175 basis points below to 75 basis
points below the one-month LIBOR rate. (A two-month
LIBOR rate is not published.)
3 months Within a range of 175 basis points below to 75 basis
points below the three-month LIBOR rate.
6 months Within a range of 175 basis points below to 75 basis
points below the six-month LIBOR rate.
12 months Within a range of 175 basis points below to 75 basis
points below the 12-month LIBOR rate.
24 months Within a range of 145 basis points below to 45 basis
points below the 12-month LIBOR rate. (A 24-month LIBOR
rate is not published.)
36 months Within a range of 145 basis points below to 45 points
below the 12-month LIBOR rate. (A 36-month LIBOR rate is
not published.)
For example, if the LIBOR rate published on the date rates are
determined with respect to a six-month deposit is 6.50%, the rate
declared on a six-month American Express Investors Certificate
greater than $250,000 but less than $1 million would be between
5.50% and 6.50%. If the LIBOR rate published for a given week with
respect to 12-month certificates is 7.00%, the Issuer's rates in
effect that week for the 24- and 36-month American Express
Investors Certificates greater than $250,000 would be between 6.30%
and 7.30%. When your application is accepted, you will be sent a
confirmation showing the rate that your investment will earn for
the first term.
LIBOR is the interbank-offered rates for dollar deposits at which
major commercial banks will lend for specific terms in the London
market. Generally, LIBOR rates quoted by major London banks will
be the same. However, market conditions, including movements in
the U.S. prime rate and the internal funding position of each bank,
may result in minor differences in the rates offered by different
banks. LIBOR is a generally accepted and widely quoted interest-
rate benchmark. The average LIBOR rate used by the Issuer is
published in The Wall Street Journal.
<PAGE>
PAGE 12
Rates for new purchases are reviewed and may change daily. The
guaranteed rate that is in effect for your chosen term on the day
your application is accepted at the Issuer's corporate office in
Minneapolis, Minnesota, U.S.A. will apply to your certificate. The
interest rates printed in the front of this prospectus may or may
not be in effect on the date your application to invest is
accepted. Rates for new purchases may vary depending on the amount
you invest, but will always be within the 100 basis point range
described above. You may obtain the current interest rates by
calling your AEBI or Coutts representative.
In determining rates based on the amount of your investment, the
Issuer may offer a rate based on your aggregate investment
determined by totaling only the amounts invested in each
certificate that has a current balance exceeding a specified level.
The current balance considered in this calculation may be exclusive
of interest. Part of the balance may be required to be invested in
terms of a specified minimum length. The certificates whose
balances are aggregated must have identical ownership. The rate
may be available only for a certificate whose current balance
exceeds a specified level or that is offered through a specified
distributor or selling agent.
Interest rates for the term you have selected will not change once
the term has begun, unless a withdrawal reduces your account value
to a point where we pay a lower interest rate, as described in
"Full and partial withdrawals" under "How to invest and withdraw
funds."
Rates for future terms
Interest on your certificate for future terms may be greater or
less than the rates you receive during your first term. In setting
future interest rates for subsequent terms, a primary consideration
will be the prevailing investment climate, including the LIBOR
rates. Nevertheless, the Issuer has complete discretion as to what
interest rates it will declare beyond the initial term. The Issuer
will send you notice at the end of each term of the rate your
certificate will earn for the new term. You have a 15-day grace
period to withdraw your certificate without a withdrawal charge.
If LIBOR is no longer publicly available or feasible to use, the
Issuer may use another, similar index as a guide for setting rates.
Additional Investments
You may add to your investment when your term ends. If your new
term is a one-month term, you may add to your investment on the
first day of your new term (the renewal date) or the following
business day if the renewal date is a non-business day. If your
new term is greater than one month, you may add to your investment
within the 15 days following the end of your term. A $25,000
minimum additional investment is required, payable in U.S.
currency. Your confirmation will show the applicable rate.
However, unless you receive prior approval from the Issuer, your
investment may not bring the aggregate net investment of any one or
more certificates held by you (excluding any interest added during <PAGE>
PAGE 13
the life of the certificate and less withdrawals) over $5 million.
Additional investments of at least $25,000 may be made by bank
wire.
The Issuer must receive your additional investment within the 15
days following the end of a certificate's current term (unless your
new investment is a one-month term), if you wish to increase your
principal investment as of the first day of the new term. Interest
accrues from the first day of the new term or the day your
additional investment is accepted by the Issuer, whichever is
later, at the rate then in effect for your account. If your new
term is a one-month term, your additional investment must be
received by the end of the certificate's current term.
The interest rate for these additional investments is the rate then
in effect for your account. If your additional investment
increases the principal of your certificate so that your
certificate's principal has exceeded a break point for a higher
interest rate, the certificate will earn this higher interest rate
for the remainder of the term, from the date the Issuer accepts the
additional investment.
Earning interest
At the end of each certificate month, interest is compounded and
credited to your account. A certificate month is the monthly
anniversary of the issue date. Interest may be paid to you monthly
in cash if you maintain a principal balance of at least $500,000.
The amount of interest you earn each certificate month is
determined by applying the interest rate then in effect to the
daily balance of your certificate, and subtracting from that total
the interest accrued on any amount withdrawn during the month.
Interest is calculated on a 360-day year basis. This means
interest is calculated on the basis of a 30-day month even though
terms are determined on a calendar month.
How to invest and withdraw funds
Buying your certificate
This certificate is available only to AEBI clients who are neither
citizens nor residents of the United States, and to U.S. trusts
organized under the laws of any state in the United States, so long
as the following are true:
o the trust is unconditionally revocable by the grantor or
grantors (the person or persons who put the money into the
trust);
o there are no more than 10 grantors of the trust;
o all the grantors are neither citizens nor residents of the
United States;
o each grantor provides an appropriately certified Form W-8 (or
approved substitute), as described under "Tax treatment of
your investment;"<PAGE>
PAGE 14
o the trustee of the trust is a bank organized under the laws of
the United States or any state in the United States; and
o the trustee supplies IDSC with appropriate tax documentation.
The certificate is available through AEBI offices located in
Florida and New York, and to the limited extent as described in the
section "Selling agreements with AEBI and Coutts," through a Coutts
office located in California. An AEBI or Coutts representative
will help you prepare your purchase application. The Issuer will
process the application at our corporate offices in Minneapolis,
MN, U.S.A. When your application is accepted and we have received
your initial investment, we will send you a confirmation of your
purchase, indicating your account number and applicable rate of
interest for your first term, as described under "Rates for new
purchases." See "Purchase policies" below.
Important: When opening an account, you must provide a Form W-8 or
approved substitute. See "Taxes on your earnings."
Purchase policies:
o You have 15 days from the date of purchase to cancel your
investment without penalty by notifying your AEBI or Coutts
representative, or by writing or calling the Client Service
Organization at the address or phone number on the cover of
this prospectus. If you decide to cancel your certificate
within this 15-day period, you will not earn any interest.
o The Issuer has complete discretion to determine whether to
accept an application and sell a certificate.
How to make investments at term end
By wire
If you have an established account, you may wire money to:
Norwest Bank Minneapolis
Routing No. 091000019
Minneapolis, MN
Attn: Domestic Wire Dept.
Give these instructions: Credit IDS Account #00-29-882 for
personal account # (your account number) for (your name).
If this information is not included, the order may be rejected and
all money received less any costs IDSC incurs will be returned
promptly.
o Minimum amount you may wire: $1,000
o Wire orders can be accepted only on days when your bank, AEFC,
IDSC and Norwest Bank Minneapolis are open for business.
<PAGE>
PAGE 15
o Purchases made by wire are accepted by AEFC only from banks
located in the United States.
o Wire purchases are completed when wired payment is received
and we accept the purchase.
o Wire purchases are not sent until the next business day.
o Wire investments must be received and accepted in the
Minneapolis headquarters on a business day before 3 p.m.
Central time to be credited that day. Otherwise your purchase
will be processed the next business day.
o The Issuer, AEFC, its subsidiaries, AEBI, and Coutts are not
responsible for any delays that occur in wiring funds,
including delays in processing by the bank.
o You must pay any fee the bank charges for wiring.
Full and partial withdrawals
You may receive all or part of your money at any time. However:
o Full and partial withdrawals of principal are subject to
penalties, described below.
o Partial withdrawals during a term must be at least $10,000.
You may not make a partial withdrawal if it would reduce your
certificate balance to less than $100,000. If you request
such a withdrawal, we will contact you for revised
instructions.
o If a withdrawal reduces your account value to a point where we
pay a lower interest rate, you will earn the lower rate from
the date of the withdrawal.
o Withdrawals before the end of the certificate month will
result in loss of interest on the amount withdrawn. You'll
get the best result by timing a withdrawal at the end of the
certificate month.
o If your certificate is pledged as collateral, any withdrawal
will be delayed until we get approval from the secured party.
Penalties for early withdrawal during a term:
When you request a full or partial withdrawal, we pay the amount
you request:
o first from interest credited during the current term,
o then from the principal of your certificate.
Any withdrawals during a term exceeding the interest credited are
deducted from the principal and are used in determining any
withdrawal charges. However the 2% penalty is waived upon the
death of the certificate owner.
<PAGE>
PAGE 16
Withdrawal penalties: When a penalty applies, a 2% withdrawal
penalty will be deducted from the account's remaining balance.
For example, assume you invest $1 million in a certificate and
select a six-month term. Four months later assume you have earned
$27,000 in interest. The following demonstrates how the withdrawal
charge is deducted:
When you withdraw a specific amount of money in excess of the
interest credited, the Issuer has to withdraw somewhat more from
your account to cover the withdrawal charge. For instance, suppose
you request a $100,000 check on a $1 million investment. The first
$27,000 paid to you is interest earned that term, and the remaining
$73,000 paid to you is principal. The Issuer would send you a
check for $100,000 and deduct a withdrawal charge of $1,460 (2% of
$73,000) from the remaining balance of your certificate. Your new
balance would be $925,540.
Total investments $1,000,000
Interest credited $ 27,000
Total balance $1,027,000
Requested check $ 100,000
Credited interest withdrawn $ (27,000)
Withdrawal charge percent 2%
Actual withdrawal charge $ 1,460
Balance prior to withdrawal $1,027,000
Requested withdrawal check $ (100,000)
Withdrawal charge $ (1,460)
Total balance after withdrawal $ 925,540
Additionally, if you make a withdrawal during a certificate month,
you will not earn interest for the month on the amount withdrawn.
For more information on withdrawal charges, talk with your AEBI or
Coutts representative.
When your certificate term ends
On or shortly after the end of the term you have selected for your
certificate, the Issuer will send you a notice indicating the
interest rate that will apply to the certificate for the new term.
When your certificate term ends, the Issuer will automatically
renew your certificate for the same term unless you notify your
AEBI or Coutts representative otherwise. If you wish to select a
different term, you must notify your representative in writing
before the end of the grace period. You will not be allowed to
select a term that would carry the certificate past its maturity
date.
The interest rates that will apply to your new term will be those
in effect on the day the new term begins. We will send you a
confirmation showing the rate of interest that will apply to the
new term you have selected. This rate of interest will not be
changed during that term.
<PAGE>
PAGE 17
If you want to withdraw your certificate without a withdrawal
charge, you must notify us within 15 calendar days following the
end of a term.
For most terms, you may also add to your investment within the 15
calendar days following the end of your term. See "Additional
investments" under "About the Certificate."
Other full and partial withdrawal policies:
o If you request a partial or full withdrawal of a certificate
recently purchased or added to by a check or money order that
is not guaranteed, we will wait for your check to clear.
Please expect a minimum of 10 days from the date of your
payment before IDSC mails a check to you. A check may be
mailed earlier if the bank provides evidence that your check
has cleared.
o If your certificate is pledged as collateral, any withdrawal
will be delayed until we get approval from the secured party.
o Any payments to you may be delayed under applicable rules,
regulations or orders of the SEC.
Transfers to other accounts
You may transfer part or all of your certificate to other IDS
certificates available through AEBI or Coutts.
Transfer of ownership
While this certificate is not a negotiable instrument, it may be
transferred or assigned on the Issuer's records if proper written
notice is received by the Issuer. Ownership may be assigned or
transferred to individuals or an entity who, for U.S. tax purposes,
is considered to be neither a citizen nor resident of the United
States. You may also pledge the certificate to AEBI or another
American Express Company affiliate or to Coutts as collateral
security. Your AEBI or Coutts representative can help you transfer
ownership.
For more information
For information on purchases, withdrawals, exchanges, transfers of
ownership, proper instructions and other service questions
regarding your certificate, please consult your AEBI relationship
manager or Coutts client relationship officer, or call the Issuer's
toll free client service number listed on the back cover.
Giving instructions and written notification
Your AEBI or Coutts representative will be happy to handle
instructions concerning your account. Written instructions may be
provided to either your representative's office or directly to the
Issuer.
<PAGE>
PAGE 18
Proper written notice to your AEBI or Coutts representative or the
Issuer must:
o be addressed to your AEBI or Coutts office or the Issuer's
corporate office, in which case it must identify your AEBI or
Coutts office,
o include your account number and sufficient information for the
Issuer to carry out your request, and
o be signed and dated by all registered owners.
The Issuer will acknowledge your written instructions. If your
instructions are incomplete or unclear, you will be contacted for
revised instructions.
In the absence of any other written mandate or instructions you
have provided to AEBI or Coutts, you may elect in writing, on your
initial or any subsequent purchase application, to authorize AEBI
or Coutts to act upon the sole verbal instructions of any one of
the named owners, and in turn to instruct the Issuer with regard to
any and all actions in connection with the certificate referenced
in the application as it may be modified from time to time by term
changes, renewals, additions or withdrawals. The individual
providing verbal instructions must be a named owner of the
certificate involved. In providing such authorization you agree
that the Issuer, its transfer agent, AEBI and Coutts will not be
liable for any loss, liability, cost or expense arising in
connection with implementing such instructions, reasonably believed
by the Issuer, AEBI or Coutts, or their representatives, to be
genuine. You may revoke such authority at any time by providing
proper written notice to your AEBI or Coutts office.
All amounts payable to or by the Issuer in connection with this
certificate are payable at the Issuer's corporate office unless you
are advised otherwise.
Purchases By Bank Wire
You may wish to lock in a specific interest rate by using a bank
wire to purchase a certificate. Your representative can instruct
you about how to use this procedure. Using this procedure will
allow you to start earning interest at the earliest possible time.
The minimum that may be wired to purchase a new certificate is
$100,000.
Wire orders will be accepted only in U.S. currency and only on days
your bank, the Issuer and Norwest Bank Minneapolis are open for
business. The payment must be received by the Issuer before 12
noon Central U.S.A. time to be credited that day. Otherwise, it
will be processed the next business day. The wire purchase will
not be made until the wired amount is received and the purchase is
accepted by the Issuer. Wire transfers not originating from AEBI
and Coutts are accepted by IDSC's corporate office only from banks
located in the United States of America. Any delays that may occur
<PAGE>
PAGE 19
in wiring the funds, including delays in processing by the banks,
are not the responsibility of the Issuer. Wire orders may be
rejected if they do not contain complete information.
While the Issuer does not charge a service fee for incoming wires,
you must pay any charge assessed by your bank for the wire service.
If a wire order is rejected, all money received will be returned
promptly less any costs incurred in rejecting it.
Tax treatment of your investment
Interest paid on your certificate is "portfolio interest" as
defined in U.S. Internal Revenue Code Section 871(h) if earned by a
nonresident alien who has supplied the Issuer with Form W-8,
Certificate of Foreign Status. Form W-8 must be supplied with both
a current mailing address and an address of foreign residency, if
different. The Issuer will not accept purchases of certificates by
nonresident aliens without an appropriately certified Form W-8 (or
approved substitute). The Form W-8 must be resupplied every three
calendar years. If you have supplied a Form W-8 that certifies
that you are a nonresident alien, the interest income will be
reported at year end to you and to the U.S. Government on a Form
1042S, Foreign Person's U.S. Source Income Subject to Withholding.
We are required to attach your Form W-8 to the forms sent to the
Internal Revenue Service (IRS). Your interest income will be
reported to the IRS even though it is not taxed by the U.S.
Government. The United States participates in various tax treaties
with foreign countries. Those treaties provide that tax
information may be shared upon request between the United States
and such foreign governments.
Withholding taxes
If you fail to provide a Form W-8 as required above, you will be
subject to backup withholding on interest payments and surrenders.
Estate tax: If you are a nonresident alien and you die while
owning a certificate, then, depending on the circumstances, the
Issuer generally will not act on instructions with regard to the
certificate unless the Issuer first receives, at a minimum, a
statement from persons the Issuer believes are knowledgeable about
your estate. The statement must be in a form satisfactory to the
Issuer and must tell us that, on your date of death, your estate
did not include any property in the United States for U.S.
<PAGE>
PAGE 20
estate tax purposes. In other cases, we generally will not take
action regarding your certificate until we receive a transfer
certificate from the IRS or evidence satisfactory to the Issuer
that the estate is being administered by an executor or
administrator appointed, qualified and acting within the United
States. In general, a transfer certificate requires the opening of
an estate in the United States and provides assurance that the IRS
will not claim your certificate to satisfy estate taxes.
Important: The information in this prospectus is a brief and
selective summary of certain federal tax rules that apply to this
certificate and is given on the basis of current law and practice.
Tax matters are highly individual and complex. Investors should
consult a qualified tax advisor regarding their own position.
Trusts
If the investor is a trust described in "Buying your certificate"
under "How to invest and withdraw funds," the policies and
procedures described above will apply with regard to each grantor.
How your money is used and protected
Invested and guaranteed by the Issuer
The American Express Investors Certificate is issued and guaranteed
by the Issuer, a wholly owned subsidiary of American Express
Financial Corporation (AEFC). We are by far the largest issuer of
face amount certificates in the United States, with total assets of
more than $____ billion and a net worth in excess of $____ million
on Dec. 31, 1996.
We back our certificates by investing the money received and
keeping the invested assets on deposit. Our investments generate
interest and dividends, out of which we pay:
o interest to certificate owners, and
o various expenses, including taxes, fees to AEFC for
advisory and other services and distribution fees to
American Express Financial Advisors Inc.
For a review of significant events relating to our business, see
"Management's discussion and analysis of financial condition and
results of operations." Our certificates are not rated by a
national rating agency.
Most banks and thrifts offer investments known as certificates of
deposit (CDs) that are similar to our certificates in many ways.
Early withdrawals of bank CDs often result in penalties. Banks and
thrifts generally have federal deposit insurance for their deposits
and lend much of the money deposited to individuals, businesses and
other enterprises. Other financial institutions and some insurance
companies may offer investments with comparable combinations of
safety and return on investment.
<PAGE>
PAGE 21
Regulated by government
Because the American Express Investors Certificate is a security,
its offer and sale are subject to regulation under federal and
state securities laws. (It is a face-amount certificate -- not a
bank product, an equity investment, a form of life insurance or an
investment trust.)
The federal Investment Company Act of 1940 requires us to keep
investments on deposit in a segregated custodial account to protect
all of our outstanding certificates. These investments back the
entire value of your certificate account. Their amortized cost
must exceed the required carrying value of the outstanding
certificates by at least $250,000. As of Dec. 31, 1996, the
amortized cost of these investments exceeded the required carrying
value of our outstanding certificates by more than $___ million.
Backed by our investments
The Issuer's investments are varied and of high quality. This was
the composition of our portfolio as of Dec. 31, 1996:
Type of investment Net amount invested
Government agency bonds
Corporate and other bonds
Preferred stocks
Mortgages
Municipal bonds
Cash and cash equivalents
As of Dec. 31, 1996 more than __% of our investment portfolio
(including bonds, preferred stocks, mortgages and cash equivalents)
is rated investment grade. For additional information regarding
securities ratings, please refer to Note 3B in the financial
statements.
Most of our investments are on deposit with American Express Trust
Company, Minneapolis, although we also maintain separate deposits
as required by certain states. American Express Trust Company is a
wholly owned subsidiary of AEFC. Copies of our Dec. 31, 1996
schedule of Investments in Securities of Unaffiliated Issuers are
available upon request. For comments regarding the valuation,
carrying values and unrealized appreciation (depreciation) of
investment securities, see Notes 1, 2 and 3 to the financial
statements.
Investment policies
In deciding how to diversify the portfolio -- among what types of
investments in what amounts -- the officers and directors of the
Issuer use their best judgment, subject to applicable law. The
following policies currently govern our investment decisions:
Debt securities-
Most of our investments are in debt securities as referenced in the
table in "Backed by our investments" under "How your money is used
and protected."<PAGE>
PAGE 22
Purchasing securities on margin -
We will not purchase any securities on margin or participate on a
joint basis or a joint-and-several basis in any trading account in
securities.
Commodities -
We have not and do not intend to purchase or sell commodities or
commodity contracts except to the extent that transactions
described in "Financial transactions including hedges" in this
section may be considered commodity contracts.
Underwriting -
We do not intend to engage in the public distribution of securities
issued by others. However, if we purchase unregistered securities
and later resell them, we may be considered an underwriter under
federal securities laws.
Borrowing money -
From time to time we have established a line of credit if
management believed borrowing was necessary or desirable. While a
line of credit does not currently exist, it may be established
again in the future. We may pledge some of our assets as security.
We may occasionally use repurchase agreements as a way to borrow
money. Under these agreements, we sell debt securities to our
lender, and repurchase them at the sales price plus an agreed-upon
interest rate within a specified period of time.
Real estate -
We may invest directly in real estate, though we have not generally
done so in the past. We do invest in mortgage loans.
Lending securities -
We may lend some of our securities to broker-dealers and receive
cash equal to the market value of the securities as collateral. We
invest this cash in short-term securities. If the market value of
the securities goes up, the borrower pays us additional cash.
During the course of the loan, the borrower makes cash payments to
us equal to all interest, dividends and other distributions paid on
the loaned securities. We will try to vote these securities if a
major event affecting our investment is under consideration.
When-issued securities-
Some of our investments in debt securities are purchased on a when-
issued basis. It may take as long as 45 days or more before these
securities are issued and delivered to us. We generally do not pay
for these securities or start earning on them until delivery. We
have established procedures to ensure that sufficient cash is
available to meet when-issued commitments.
Financial transactions including hedges-
We buy or sell various types of options contracts for hedging
purposes or as a trading technique to facilitate securities
purchases or sales. We buy interest rate caps for hedging
purposes. These pay us a return if interest rates rise above a
specified level. The Issuer may enter into other financial
transactions, including futures and other derivatives, for the
purpose of managing the interest rate exposures associated with the
Issuer's assets or liabilities. We do not use derivatives for<PAGE>
PAGE 23
speculative purposes.
Illiquid securities -
A security is illiquid if it cannot be sold in the normal course of
business within seven days at approximately its current market
value. Some investments cannot be resold to the U.S. public
because of their terms or government regulations. All securities,
however can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. IDSC's
investment advisor will follow guidelines established by the board
and consider relevant factors such as the nature of the security
and the number of likely buyers when determining whether a security
is illiquid. No more than 15% of IDSC's investment portfolio will
be held in securities that are illiquid. In valuing its investment
portfolio to determine this 15% limit, IDSC will use statutory
accounting under an SEC order. This means that, for this purpose,
the portfolio will be valued in accordance with applicable
Minnesota law governing investments of life insurance companies,
rather than generally accepted accounting principles.
Restrictions -
There are no restrictions on concentration of investments in any
particular industry or group of industries or on rates of portfolio
turnover.
Certain investment considerations
The price of bonds generally falls as interest rates increase, and
rises as interest rates decrease. The price of a bond also
fluctuates if its credit rating is upgraded or downgraded. The
price of bonds below investment grade may react more to the ability
of a company to pay interest and principal when due than to changes
in interest rates. They have greater price fluctuations, are more
likely to experience a default, and sometimes are referred to as
junk bonds. Reduced market liquidity for these bonds may
occasionally make it more difficult to value them. In valuing
bonds, IDSC relies both on independent rating agencies and the
investment manager's credit analysis. Under normal circumstances,
at least 85% of the securities in IDSC's Portfolio will be rated
investment grade, or in the opinion of IDSC's investment advisor
will be the equivalent of investment grade. Under normal
circumstances, IDSC will not purchase any security rated below B-
by Moody's Investors Service, Inc. or Standard & Poor's
Corporation. Securities that are subsequently downgraded in
quality may continue to be held by IDSC and will be sold only when
IDSC believes it is advantageous to do so.
As of Dec. 31, 1996, IDSC held about ___% of its investment
portfolio (including bonds, preferred stocks, mortgages and cash
equivalents) in bonds rated below investment grade.
When-issued securities are subject to market fluctuations and they
may affect IDSC's investment portfolio the same as owned
securities.
<PAGE>
PAGE 24
Derivatives are financial instruments whose performance is derived,
at least in part, from the performance of an underlying asset,
security or index. A small change in the value of the underlying
asset, security or index may cause a sizable gain or loss in the
fair value of the derivative.
How your money is managed
Relationship between the Issuer and American Express Financial
Corporation
The Issuer was originally organized as Investors Syndicate of
America, Inc., a Minnesota corporation, on Oct. 15, 1940, and began
business as an issuer of face amount investment certificates on
Jan. 1, 1941. The company became a Delaware corporation on Dec.
31, 1977, and changed its name to IDS Certificate Company on April
2, 1984.
Before the Issuer was created, AEFC (formerly known as IDS
Financial Corporation), our parent company, had issued similar
certificates since 1894. As of Jan. 1, 1995, IDS Financial
Corporation changed its name to AEFC. The Issuer and AEFC have
never failed to meet their certificate payments.
During its many years in operation, AEFC has become a leading
manager of investments in mortgages and securities. As of Dec. 31,
1996, AEFC managed investments, including its own, of more than
$___ billion. American Express Financial Advisors Inc., a wholly
owned subsidiary of AEFC, provides a broad range of financial
planning services for individuals and businesses through its
nationwide network of more than 175 offices and more than 7,800
financial advisors. American Express Financial Advisors' financial
planning services are comprehensive, beginning with a detailed
written analysis that's tailored to your needs. Your analysis may
address one or all of these six essential areas: financial
position, protection planning, investment planning, income tax
planning, retirement planning and estate planning.
AEFC itself is a wholly owned subsidiary of American Express
Company, a financial services company with executive offices at
American Express Tower, World Financial Center, New York, NY 10285.
American Express Company is a financial services company engaged
through subsidiaries in other businesses including:
o travel related services (including American Express(R) Card
and Travelers Cheque operations through American Express
Travel Related Services Company, Inc. and its subsidiaries),
and
o international banking services (through American Express Bank
Ltd. and its subsidiaries including American Express Bank
International).
American Express Financial Advisors Inc. is not a bank, and the
securities offered by it, such as face amount certificates issued
by IDSC, are not backed or guaranteed by any bank, nor are they
insured by the FDIC.
<PAGE>
PAGE 25
Capital structure and certificates issued
The Issuer has authorized, issued and has outstanding 150,000
shares of common stock, par value of $10 per share. AEFC owns all
of the outstanding shares.
As of Dec. 31, 1996, the Issuer had issued (in face amount)
$__________ of installment certificates and $__________ of single
payment certificates.
Investment management and services
Under an Investment Advisory and Services Agreement, AEFC acts as
our investment advisor and is responsible for:
o providing investment research,
o making specific investment recommendations, and
o executing purchase and sale orders according to our policy of
obtaining the best price and execution.
All these activities are subject to direction and control by our
board of directors and officers. Our agreement with AEFC requires
annual renewal by our board, including a majority of directors who
are not interested persons of AEFC or the Issuer as defined in the
federal Investment Company Act of 1940.
For its services, we pay AEFC a monthly fee, equal on an annual
basis to a percentage of the total book value of certain assets
(included assets).
Advisory and services fee computation:
Included assets Percentage of total book value
First $250 million 0.75%
Next 250 million 0.65
Next 250 million 0.55
Next 250 million 0.50
Any amount over 1 billion 0.45
Included assets are all assets of the Issuer except mortgage loans,
real estate, and any other asset on which we pay an advisory or
service fee.
Advisory and services fee for the past three years:
Percentage of
Year Total fees included assets
1995 $16,472,458 0.50%
1994 $13,565,432 0.51
1993 $15,036,091 0.50
Estimated advisory and services fees for 1997 are $__________.
<PAGE>
PAGE 26
Other expenses payable by the Issuer: The Investment Advisory and
Services Agreement provides that we will pay:
o costs incurred by us in connection with real estate and
mortgages,
o taxes,
o depository and custodian fees,
o brokerage commissions,
o fees and expenses for services not covered by other agreements
and provided to us at our request, or by requirement, by
attorneys, auditors, examiners and professional consultants
who are not officers or employees of AEFC,
o fees and expenses of our directors who are not officers or
employees of AEFC,
o provision for certificate reserves (interest accrued on
certificate owner accounts), and
o expenses of customer settlements not attributable to sales
function.
Distribution
Under a Distribution Agreement with American Express Financial
Advisors Inc., the Issuer pays an annualized fee equal to 1% of the
amount outstanding for the distribution of this certificate.
Payments are made at the end of each term on certificates with a
one-, two- or three-month term. Payments are made each quarter
from issuance date on certificates with a six-, 12-, 24- or 36-
month term.
Total distribution fees paid to American Express Financial Advisors
Inc. for all series of certificates amounted to $__________ during
the year ended Dec. 31, 1996. The Issuer expects to pay American
Express Financial Advisors Inc. distribution fees amounting to
$__________ during 1997.
See Note 1 to Financial statements regarding deferral of
distribution fee expense.
American Express Financial Advisors Inc. pays selling expenses in
connection with services to the Issuer. The Issuer's board of
directors, including a majority of directors who are not interested
persons of AEFC or IDSC, approved this distribution agreement.
Selling agreements with AEBI and Coutts: In turn, under Selling
Agent Agreements with AEBI and Coutts, American Express Financial
Advisors compensates each for their services as Selling Agents of
this certificate as follows:
AEBI is paid an annualized fee ranging from 0.50% to 1.25% of the
reserve balance of each certificate, depending on the amount
outstanding for each such certificate, with this exception: the
fee will be 0.30% of the reserve balance of each certificate with
an amount outstanding of $5 million or more when:
<PAGE>
PAGE 27
o the aggregate reserve balance for that certificate, and any
other certificate with identical ownership and an amount
outstanding of $5 million or more, is at least $20 million,
and
o at least $5 million of this aggregate reserve balance is
invested for a term of 12 months or longer.
Coutts is paid an annualized fee ranging from 0.425% to 0.68% of
the reserve balance of each certificate owned by a client who is a
former client of AEBI, depending on the amount outstanding for each
certificate. These clients must have continuously owned a
certificate since Nov. 10, 1994. Coutts is also compensated on
additional investments and exchanges made by such clients to other
certificates only to the extent that clients have the right to make
additional investments or exchanges.
American Express Financial Advisors has entered into a consulting
agreement with AEBI under which AEBI provides consulting services
related to any selling agent agreements between American Express
Financial Advisors and other Edge Act corporations. For these
services, American Express Financial Advisors pays AEBI a fee for
this certificate ranging from 0.075% to 0.12% of the reserve
balance of each certificate, depending on the amount outstanding
for each certificate for which another Edge Act corporation is the
selling agent.
Such payments will be made periodically in arrears.
These fees are not assessed to your certificate account.
About AEBI and Coutts
AEBI is an Edge Act corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act. It is a wholly owned
subsidiary of American Express Bank Ltd. (AEBL). As an Edge Act
corporation, AEBI is subject to the provisions of Section 25(a) of
the Federal Reserve Act and Regulation K of the Board of Governors
of the Federal Reserve System (the Federal Reserve). It is
supervised and regulated by the Federal Reserve.
AEBI has an extensive international high net-worth client base that
is serviced by a marketing staff in New York and Florida. The
banking and financial products offered by AEBI include checking,
money market and time deposits, credit services, check collection
services, foreign exchange, funds transfer, investment advisory
services and securities brokerage services. As of Dec. 31, 1996,
AEBI had total assets of $___ million and total equity of $___
million.
Coutts is an Edge Act corporation organized under the provisions of
Section 25(a) of the Federal Reserve Act. It is an indirect wholly
owned subsidiary of NatWest PLC. As an Edge Act corporation,
Coutts is subject to the provisions of Section 25(a) of the Federal
Reserve Act and Regulation K of the Board of Governors of the
Federal Reserve System (the Federal Reserve). It is supervised and
regulated by the Federal Reserve.
<PAGE>
PAGE 28
Although AEBI and Coutts are banking entities, the American Express
Investors Certificate is not a bank product, nor is it backed or
guaranteed by AEBI or Coutts, by AEBL, by NatWest PLC or by any
other bank, nor is it guaranteed or insured by the FDIC or any
other federal agency. AEBI is registered where necessary as a
securities broker-dealer.
Employment of other American Express affiliates
AEFC may employ an affiliate of American Express Company as
executing broker for our portfolio transactions only if:
o we receive prices and executions at least as favorable as
those offered by qualified independent brokers performing
similar services;
o the affiliate charges us commissions consistent with those
charged to comparable unaffiliated customers for similar
transactions; and
o the affiliate's employment is consistent with the terms of the
current Investment Advisory and Services Agreement and federal
securities laws.
Directors and officers
The Issuer's directors, chairman, president and controller are
elected annually for a term of one year. The other executive
officers are appointed by the president.
We paid a total of $______ during 1996 to directors not employed by
AEFC.
Board of directors
David R. Hubers*
Born in 1943. Director since 1987.
President and chief executive officer of AEFC since 1993. Senior
vice president and chief financial officer of AEFC from 1984 to
1993.
Charles W. Johnson
Born in 1929. Director since 1989.
Director, Communications Holdings, Inc. Former vice president and
group executive, Industrial Systems, with Honeywell, Inc. Retired
1989.
Richard W. Kling*
Born in 1940. Director since 1996.
Chairman of the board of directors since 1996. Director of IDS
Life Insurance Company since 1984; president since 1994. Executive
vice president of marketing and products of AEFC from 1988 to 1994.
Senior vice president of AEFC since 1994. Director of IDS Life
Series Fund, Inc. and member of the board of managers of IDS Life
Variable Annuity Funds A and B.
<PAGE>
PAGE 29
Edward Landes
Born in 1919. Director since 1984.
Development consultant. Director of IDS Life Insurance Company of
New York. Director of Endowment Development, YMCA of Metropolitan
Minneapolis. Vice President for Financial Development, YMCA of
Metropolitan Minneapolis from 1985 through 1995. Former sales
manager - Supplies Division and district manager - Data Processing
Division of IBM Corporation. Retired 1983.
John V. Luck, Ph.D.
Born in 1926. Director since 1987.
Former senior vice president - Science and Technology with General
Mills, Inc. Employed with General Mills, Inc. since 1968. Retired
1988.
James A. Mitchell*
Born in 1941. Director since 1994.
Chairman of the board of directors from 1994 to 1996. Executive
vice president - marketing and products of AEFC since 1994. Senior
vice president - insurance operations of AEFC and president and
chief executive officer of IDS Life Insurance Company from 1986 to
1994.
Harrison Randolph
Born in 1916. Director since 1968.
Engineering, manufacturing and management consultant since 1978.
Gordon H. Ritz
Born in 1926. Director since 1968.
Director, Mid-America Publishing and Atrix International, Inc.
Former president, Com Rad Broadcasting Corp. Former director,
Sunstar Foods.
Stuart A. Sedlacek*
Born in 1957. Director since 1994.
President since 1994. Vice president - assured assets of AEFC
since 1994. Vice president and portfolio manager from 1988 to
1993. Executive vice president - assured assets of IDS Life
Insurance Company since 1994.
*"Interested Person" of IDSC as that term is defined in Investment
Company Act of 1940.
Executive officers
Stuart A. Sedlacek
Born in 1957. President since 1994.
Morris Goodwin Jr.
Born in 1951. Vice president and treasurer since 1989.
Vice president and corporate treasurer of AEFC since 1989. Chief
financial officer and treasurer of American Express Trust Company
from 1988 to 1989.
<PAGE>
PAGE 30
Timothy S. Meehan
Born in 1957. Secretary since 1995.
Secretary of AEFC and American Express Financial Advisors Inc.
since 1995. Senior counsel to AEFC since 1995. Counsel from 1990
to 1995.
Lorraine R. Hart
Born in 1951. Vice president - investments since 1994.
Vice president - insurance investments of AEFC since 1989. Vice
president - investments of IDS Life Insurance Company since 1992.
Jay C. Hatlestad
Born in 1957. Vice president and controller of IDSC since 1994.
Manager of investment accounting of IDS Life Insurance Company from
1986 to 1994.
Bruce A. Kohn
Born in 1951. Vice president and general counsel since 1993.
Senior counsel to AEFC since 1996. Counsel to AEFC from 1992 to
1996. Associate counsel from 1987 to 1992.
F. Dale Simmons
Born in 1937. Vice president - real estate loan management since
1993. Vice president of AEFC since 1992. Senior portfolio manager
of AEFC since 1989. Assistant vice president from 1987 to 1992.
The officers and directors as a group beneficially own less than 1%
of the common stock of American Express Company.
The Issuer has provisions in its bylaws relating to the
indemnification of its officers and directors against liability, as
permitted by law. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that
in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
Auditors
A firm of independent auditors audits our financial statements at
the close of each fiscal year (Dec. 31). Copies of our annual
financial statements (audited) and semiannual financial statements
(unaudited) are available to any certificate owner upon request.
Ernst & Young LLP, Minneapolis, has audited the financial
statements for each of the years in the three-year period ended
Dec. 31, 1996. These statements are included in this prospectus.
Ernst & Young LLP is also the auditor for American Express Company,
the parent company of AEFC and IDSC.
<PAGE>
PAGE 31
Appendix
Description of corporate bond ratings
Bond ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca and C. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk. Interest and principal are secure.
Aa/AA - Judged to be high-grade although margins of protection for
interest and principal may not be quite as good as Aaa or AAA rated
securities.
A - Considered upper-medium grade. Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.
Baa/BBB - Considered medium-grade obligations. Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.
Ba/BB - Considered to have speculative elements. The protection of
interest and principal payments may be very moderate.
B - Lack characteristics of more desirable investments. There may
be small assurance over any long period of time of the payment of
interest and principal.
Caa/CCC - Are of poor standing. Such issues may be in default or
there may be risk with respect to principal or interest.
Ca/CC - Represent obligations that are highly speculative. Such
issues are often in default or have other marked shortcomings.
C - Are obligations with a higher degree of speculation. These
securities have major risk exposures to default.
D - Are in payment default. The D rating is used when interest
payments or principal payments are not made on the due date.
Non-rated securities will be considered for investment. When
assessing each non-rated security, IDSC will consider the financial
condition of the issuer or the protection afforded by the terms of
the security.
<PAGE>
PAGE 32
(Outside back cover)
Quick telephone reference
Selling Agent:
American Express Bank International
Region offices
101 East 52nd Street
29th Floor
New York, NY 10022
(212) 415-9500
1221 Brickell Avenue
8th Floor
Miami, FL 33131
(305) 350-2502
Selling agent
Coutts & Co. (USA) International
350 South Grand Avenue
39th Floor
Los Angeles, CA 90071
(213) 613-2244
American Express Investors Certificate
IDS Tower 10
Minneapolis, MN 55440-0010
Distributed by American Express Financial Advisors Inc.
<PAGE>
PAGE 33
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item
Number
Item 13. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and
distribution of the securities being registered are to be
borne by the registrant.
Item 14. Indemnification of Directors and Officers.
The By-Laws of IDS Certificate Company provide that it
shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that
he was or is a director, officer, employee or agent of
the company, or is or was serving at the direction of the
company, or any predecessor corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to
any threatened, pending or completed action, suit or
proceeding, wherever brought, to the fullest extent
permitted by the laws of the state of Delaware, as now
existing or hereafter amended.
The By-Laws further provide that indemnification
questions applicable to a corporation which has been
merged into the company relating to causes of action
arising prior to the date of such merger shall be
governed exclusively by the applicable laws of the state
of incorporation and by the by-laws of such merged
corporation then in effect. See also Item 17.
Item 15. Recent Sales of Unregistered Securities.
(a) Securities Sold
Period of sale Title of securities Amount sold
1993 IDS Special Deposits $ 8,367,601.13
1994 IDS Special Deposits 18,013,424.38
1995 IDS Special Deposits 56,855,953.53
1996 IDS Special Deposits* 41,064,486.74
*Renamed American Express Special Deposits in April, 1996.
(b) Underwriters and other purchasers
IDS Special Deposits are marketed by American Express Bank Ltd.
(AEBL), an affiliate of IDS Certificate Company, to private banking
clients of AEBL in the United Kingdom and Hong Kong.
(c) Consideration
All IDS Special Deposits were sold for cash. The aggregate
offering price was the same as the amount sold in the table above.
Aggregate marketing fees to AEBL were $153,318.21 in 1993,
$88,686.14 in 1994, $172,633.41 in 1995, and $301,946.44 in 1996.
<PAGE>
PAGE 34
(d) Exemption from registration claimed
American Express Special Deposits are marketed, pursuant to the
exemption in Regulation S under the Securities Act of 1933, by AEBL
in the United Kingdom and Hong Kong to persons who are not U.S.
persons, as defined in Regulation S.
Item 16. Exhibits and Financial Statement Schedules.
(a) The following exhibits to this Post-Effective Amendment
No. 12 to Registration Statement No. 33-26844 are
incorporated herein by reference or attached hereto:
1. (a) Copy of Distribution Agreement dated November
18, 1988, between Registrant and IDS Financial
Services Inc., filed electronically as Exhibit
1(a) to the Registration Statement for the
American Express International Investment
Certificate (now called, the IDS Investors
Certificate), is incorporated herein by
reference.
(b) Selling Agent Agreement dated June 1, 1990
between American Express Bank International and
IDS Financial Services Inc. for the American
Express Investors Certificate, filed
electronically as Exhibit 1 to the Pre-
Effective Amendment 2 to Registration Statement
No. 33-26844 for the IDS Investors Certificate
is incorporated herein by reference.
(c) Amendment to the Selling Agent Agreement dated
Dec. 12, 1994 between American Express Bank
International and IDS Financial Services Inc.
for the IDS Investors Certificate is filed
electronically as Exhibit 1(d) to Post-
Effective Amendment No. 9 to Registration
Statment No. 33-26844 for IDS Investors
Certificate is incorporated herein by
reference.
(d) Selling Agent Agreement dated Dec. 12, 1994
between American Express Bank International,
Coutts & Co (USA) International and IDS
Financial Services Inc. for the Investors
Certificate is filed electronically. As
Exhibit 1(e) to Post-Effective Amendment No. 9
to Registration Statment No. 33-26844 for IDS
Investors Certificate is incorporated herein by
reference.<PAGE>
PAGE 35
(e) Consulting Agreement dated Dec. 12, 1994
between American Express Bank and IDS Financial
Services Inc. for the IDS Investors Certificate
is filed electronically. As Exhibit 1(f) to
Post-Effective Amendment No. 9 to Registration
Statment No. 33-26844 for IDS Investors
Certificate is incorporated herein by
reference.
(f) Marketing Agreement dated October 10,1991,
between Registrant and American Express Bank
Ltd., filed electronically as Exhibit 1(d) to
Post-Effective Amendment No. 31 to Registration
Statement 2-55252, is incorporated herein by
reference.
2. Not Applicable.
3. (a) Certificate of Incorporation, dated December
31, 1977, filed electronically as Exhibit 3(a)
to Post-Effective Amendment No. 2 to
Registration Statement No. 2-95577, is
incorporated herein by reference.
(b) Certificate of Amendment, dated February 29,
l984, filed electronically as Exhibit 3(b) to
Post-Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(c) By-Laws, dated December 31, 1977, filed
electronically as Exhibit 3(c) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, are incorporated herein
by reference.
4. Not applicable.
5. An Opinion and Consent of Counsel as to the legality
of the securities being registered is filed with the
Registrant's most recent 24F-2 Notice.
6 through 9. -- None.
10. (a) Investment Advisory and Services Agreement
between Registrant and IDS/American Express
Inc., dated January 12, 1984, filed
electronically as Exhibit 10(a) to Post-
Effective Amendment No. 2 to Registration
Statement No. 2-95577, is incorporated herein
by reference.
(b) Depository and Custodial Agreement, between IDS
Certificate Company and IDS Trust Company dated
September 30, 1985, filed electronically as
Exhibit 10(b) to Post-Effective Amendment No. 2
to Registration Statement No. 2-95577, is
incorporated herein by reference.
<PAGE>
PAGE 36
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16.
(a) Continued
(c) Foreign Deposit Agreement dated November 24,
1990, between Registrant and IDS Bank & Trust,
filed electronically as Exhibit 10(h) to Post-
Effective Amendment No. 5 to Registration
Statement No. 33-26844, is incorporated herein
by reference.
11 through 24. -- None.
25. (a) Officers' Power of Attorney, dated May 17,
1994, filed electronically as Exhibit
25(a) to Post-Effective Amendment No. 9 to
Registration Statement No. 2-95577, is
incorporated herein by reference.
(b) Directors' Power of Attorney, dated
February 29, 1996 filed electronically as
Exhibit 25(b) to Post-Effective Amendment
No. 13 to Registration Statement No.
33-26844 is incorporated herein by
reference.
26 through 28. -- None.
(b) The financial statement schedules for IDS Certificate Company
will be filed electronically as Exhibit 16(b) to Post-
Effective Amendment No. 40 to Registration Statement No. 2-
55252 for Series D-1 Investment Certificate, and will be
incorporated by reference.
Item 17. Undertakings.
Without limiting or restricting any liability on the part
of the other, American Express Financial Advisors Inc.,
(formerly, IDS Financial Services Inc.) as underwriter,
and American Express Bank International and Coutts & Co
(USA) International, as selling agents, will assume any
actionable civil liability which may arise under the
Federal Securities Act of 1933, the Federal Securities
Exchange Act of 1934 or the Federal Investment Company
Act of 1940, in addition to any such liability arising at
law or in equity, out of any untrue statement of a
material fact made by their respective agents in the due
course of their business in selling or offering for sale,
or soliciting applications for, securities issued by the
Company or any omission on the part of their respective
agents to state a material fact necessary in order to
make the statements so made, in the light of the
circumstances in which they were made, not misleading (no
such untrue statements or omissions, however, being
admitted or contemplated), but such liability shall be
subject to the conditions and limitations described in
said Acts. American Express Financial Advisors Inc., <PAGE>
PAGE 37
American Express Bank International and Coutts & Co (USA)
International will also assume any liability of the
Company for any amount or amounts which the Company
legally may be compelled to pay to any purchaser under
said Acts because of any untrue statements of a material
fact, or any omission to state a material fact, on the
part of the respective agents of American Express
Financial Advisors Inc., American Express Bank
International, and Coutts & Co (USA) International to the
extent of any actual loss to, or expense of, the Company
in connection therewith. The By-Laws of the Registrant
contain a provision relating to Indemnification of
Officers and Directors as permitted by applicable law.
<PAGE>
PAGE 38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this amendment to this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minneapolis and State of Minnesota,
on the 17th day of January, 1997.
IDS CERTIFICATE COMPANY
By /s/ Stuart A. Sedlacek*
Stuart A. Sedlacek, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment has been signed below by the following persons in the
capacities on the 17th day of January, 1997.
Signature Capacity
/s/ Stuart A. Sedlacek* ** President and Director
Stuart A. Sedlacek (Principal Executive
Officer)
/s/ Morris Goodwin* Vice President and
Morris Goodwin Treasurer
(Principal Financial
Officer)
/s/ Jay C. Hatlestad* Vice President and
Jay C. Hatlestad Controller
(Principal Accounting
Officer)
/s/ David R. Hubers** Director
David R. Hubers
/s/ Charles W. Johnson** Director
Charles W. Johnson
/s/ Richard W. Kling** Chairman of the
Richard W. Kling Board of Directors
and Director
/s/ Edward Landes** Director
Edward Landes
Signatures continued on next page.
<PAGE>
PAGE 39
Signatures continued from previous page.
Signature Capacity
/s/ John V. Luck** Director
John V. Luck
/s/ James A. Mitchell** Director
James A. Mitchell
/s/ Harrison Randolph** Director
Harrison Randolph
/s/ Gordon H. Ritz** Director
Gordon H. Ritz
*Signed pursuant to Officers' Power of Attorney dated May 17, 1994
filed electronically as Exhibit 25(a) to Post-Effective Amendment
No. 10, to Registration Statement No. 33-26844, incorporated herein
by reference.
________________________
Bruce A. Kohn
**Signed pursuant to Directors' Power of Attorney dated February
29, 1996 filed electronically as Exhibit 25(b) to Post-Effective
Amendment No. 13 to Registration Statement No. 2-95577,
incorporated herein by reference.
________________________
Bruce A. Kohn
<PAGE>
PAGE 40
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 13 TO REGISTRATION
STATEMENT NO. 33-26844
Cover Page
Prospectus
Part II Information
Signatures
