8-KOther EventsExhibits & Filings

UNITED PARCEL SERVICE INC 8-K Report, Corporate Update (Nov 14, 2017)

Filed November 14, 2017For Securities:UPS

Summary

United Parcel Service Inc. (UPS) filed an 8-K on November 13, 2017, to report on a significant debt financing transaction that occurred on November 8, 2017. The company entered into agreements to issue a substantial amount of senior notes, totaling approximately $4.4 billion across various maturities and interest rates. This includes both floating rate and fixed rate senior notes, with maturities ranging from 2021 to 2047, and one floating rate note extending to 2067. The proceeds from these transactions are primarily earmarked for strengthening the company's financial position. Specifically, UPS intends to use a significant portion of the proceeds to make early contributions to its domestic pension plans, repay an upcoming $750 million senior note maturity in January 2018, and reduce outstanding commercial paper. The remaining proceeds are allocated for general corporate purposes, indicating a strategic move to manage debt, bolster pension obligations, and maintain financial flexibility.

Key Highlights

  • 1UPS issued approximately $4.4 billion in senior notes across multiple tranches and maturities.
  • 2The new debt includes both Floating Rate Senior Notes and fixed-rate Senior Notes.
  • 3Maturities for the issued notes range from 2021 to 2047, with one floating rate note maturing in 2067.
  • 4Proceeds will be used for early contributions to domestic pension plans.
  • 5A portion of the proceeds will be used to repay $750 million of 5.50% Senior Notes due January 15, 2018.
  • 6The company also plans to reduce commercial paper outstanding and use remaining funds for general corporate purposes.

Frequently Asked Questions

The primary purpose of this debt issuance is to strengthen UPS's financial structure. The proceeds are intended to fund early contributions to domestic pension plans, repay an upcoming $750 million debt maturity, reduce commercial paper, and for general corporate purposes.

UPS issued a total of approximately $4.4 billion in senior notes through two separate agreements: the U.S. Transaction ($4.35 billion) and the Additional Transaction ($63.89 million).

The maturities range from 2021 to 2047, with a Floating Rate Senior Note due 2067. The fixed-rate notes include 2.050% due 2021, 2.500% due 2023, 2.800% due 2024, 3.050% due 2027, and 3.750% due 2047. There were also Floating Rate Senior Notes issued due 2021, 2023, and 2067.

This issuance directly addresses the repayment of $750 million in 5.50% Senior Notes maturing in January 2018, thereby managing near-term debt maturities and potentially refinancing at different terms.