UPS gets $1.5 billion 364-day revolver, $1 billion five-year revolver

By Angela McDaniels

Tacoma, Wash., April 13 - United Parcel Service, Inc. entered into a $1.5 billion 364-day revolving credit facility and a $1 billion five-year revolver on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate is Libor plus a percentage determined by quotations from Markit Group Ltd. for UPS' credit default swap spread, subject to minimum and maximum margins.

For the 364-day facility, the minimum margin is 10 bps and the maximum margin is 75 bps. For the revolver, the minimum margin ranges from 10 bps to 37.5 bps and the maximum margin ranges from 75 bps to 125 bps depending on the company's debt ratings.

The company is also able to request advances under the facilities based on competitive bids. Each competitive bid advance must be at least $25 million.

The commitment fee is 2 bps for the 364-day facility and 4.5 bps to 10 bps for the revolver.

The 364-day facility matures April 11, 2013 and can be extended by 364 days. The revolver will mature April 12, 2017 unless UPS has requested and obtained one or more one-year extensions. Any extension is subject to the payment of a 0.5% fee. The revolver will only be extended if lenders holding more than 50% of the total commitments have approved the extension.

The company can request that the 364-day facility be converted into a term loan maturing no later than April 11, 2014. The interest rate would be Libor plus 75 bps.

The revolver has a $500 million accordion feature.

The company must maintain a minimum consolidated net worth (excluding accumulated other comprehensive income or loss) of $5 billion on a quarterly basis and at the time of any borrowings.

The proceeds will be used for working capital and other general corporate purposes.

Citibank, NA is the administrative agent.

The facilities replace the company's $1.5 billion 364-day revolver and $1 billion four-year revolver dated April 14, 2011.

UPS is a package delivery company based in Atlanta.

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