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UPS Sells $1.75 Billion of Debt With First Offering in Two Years

Sept. 24 (Bloomberg) -- United Parcel Service Inc. raised $1.75 billion in a three-part offering to refinance maturing debt, the company’s first bond sale in almost two years.

The world’s largest package-delivery company sold $375 million of 1.125 percent, five-year securities that yield 50 basis points more than similar-maturity Treasuries, $1 billion of 2.45 percent, 10-year bonds with a 75 basis-point spread and $375 million of 3.625 percent, 30-year debt with a spread of 80, data compiled by Bloomberg show. Proceeds will be used to repay its 4.5 percent notes due in January and for general corporate purposes, Atlanta-based UPS said today in a regulatory filing.

The shipper borrowed the money after yields on investment-grade debt fell last week to an unprecedented 2.92 percent, according to Bank of America Merrill Lynch index data. The freight company, which last issued bonds in November 2010 with a $2 billion sale, has a weighted average maturity of 13.2 years on its $10 billion of bonds outstanding, according to data compiled by Bloomberg.

Other borrowers that sold or planned to sell at least $10 billion of dollar-denominated debt today included Penske Truck Leasing Co., which issued $1.5 billion of bonds in a two-part sale, and lenders Swedbank AB and Credit Agricole SA, which each offered $1 billion.

Bank of America Corp., Morgan Stanley and UBS AG managed the UPS sale, according to the filing. Moody’s Investors Service said in a statement today it rated the bonds Aa3, its fourth-highest grade.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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