S&P rates UPS notes A+

S&P said it assigned an A+ rating to United Parcel Service Inc.'s euro-denominated senior unsecured notes due 2028 and dollar-denominated senior unsecured notes due 2026 and 2046.

The outlook is negative.

The proceeds will be used for general corporate purposes, including the repayment of its commercial-paper borrowings, S&P said.

The corporate credit rating reflects the company's dominant position in domestic ground parcel delivery, substantial position in domestic air express, well-established and growing international network and strong and consistent profitability, the agency said.

The intensely competitive, somewhat cyclical and highly capital-intensive nature of the small parcel and air express delivery businesses partly offset these strengths, S&P said.

The negative outlook reflects an expectation that the company's earnings and cash flow will improve, but continued low interest rates will cause UPS to maintain a substantial pension deficit under its own plans and the multi-employer pension plans in which it participates, the agency said.

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