8-KEarnings & ResultsMaterial AgreementsFinancial Events+1

UNITED PARCEL SERVICE INC 8-K Report, Material Agreement (Apr 25, 2006)

Filed April 25, 2006For Securities:UPS

Summary

United Parcel Service Inc. (UPS) filed an 8-K on April 25, 2006, to report on significant financial actions taken around April 19-20, 2006. A primary focus is the establishment of a new $1.0 billion 364-day revolving credit facility, which superseded and replaced a previous $1.0 billion 364-day facility that expired on April 20, 2006. This new facility provides UPS with flexible access to funds for general corporate purposes, including backing its commercial paper program. The company also announced its first-quarter 2006 financial results via a press release filed with this report. While specific financial figures are not detailed within the 8-K text itself, the filing indicates that the company is actively managing its debt and liquidity. The new credit facility includes provisions for renewal or conversion into a term loan, offering strategic financial flexibility. Key covenants and conditions, such as maintaining a minimum consolidated net worth of $3.0 billion and restrictions on secured indebtedness, are also detailed.

Key Highlights

  • 1UPS entered into a new $1.0 billion 364-day revolving credit facility on April 20, 2006, with Citibank as the administrative agent.
  • 2This new facility replaced a prior $1.0 billion 364-day revolving credit facility that expired on April 20, 2006.
  • 3The proceeds from the new credit facility are intended for general corporate purposes, including serving as a backstop for commercial paper.
  • 4The facility allows for potential renewal for an additional 364-day period or conversion into a three-year term loan maturing in April 2010.
  • 5Interest rates are tied to a base rate for USD advances and LIBOR plus a margin for non-USD advances, with potential margin increases if converted to a term loan.
  • 6The agreement includes customary covenants, such as maintaining a minimum consolidated net worth of $3.0 billion and restrictions on secured indebtedness.
  • 7The filing also incorporates a press release dated April 20, 2006, detailing UPS's financial results for the first quarter ended March 31, 2006.

Frequently Asked Questions

The new $1.0 billion 364-day revolving credit facility is intended for general corporate purposes, including providing a backstop for the company's commercial paper program, ensuring liquidity and financial flexibility.

The facility has a 364-day term, maturing on April 19, 2007, with an option for renewal for another 364 days or conversion into a three-year term loan. Interest is based on a base rate for USD or LIBOR plus a margin for non-USD advances. It includes covenants such as maintaining a $3.0 billion minimum net worth and restrictions on secured debt.

The previous $1.0 billion 364-day revolving credit facility expired on April 20, 2006, and was terminated in connection with the entry into the new credit facility.

The 8-K filing states that a press release containing UPS's financial results for the first quarter ended March 31, 2006, was issued on April 20, 2006, and is attached as Exhibit 99.1 to this filing.