Moody’s assigns Aa3 to UPS notes

Moody's Investors Service said it assigned an Aa3 rating to the new euro-denominated senior notes that United Parcel Service, Inc. launched on Nov. 13.

UPS announced its plan to sell €450 million of floating-rate senior notes due in July 2020 and €750 million of fixed-rate senior notes due in August 2025.

The company will use the proceeds for general corporate purposes, including the repayment of commercial paper, the balance of which meaningfully increased following the acquisition of Coyote Logistics for about $1.8 billion in August 2015.

The outlook is negative.

Moody’s said UPS' strong business profile and leading position in the global package delivery, freight and logistics industries have supported the current positioning of the rating at Aa3. Revenue diversification from its global footprint, industry-leading EBIT margin produced by its integrated network, and a significant variable cost component mitigate near-term ratings pressure.

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