TEXT - S&P says UPS ratings unaffected by canceled TNT acquisition
Jan 14 - Standard & Poor's Ratings Services said its ratings on United Parcel Service Inc. (UPS) (A+/Negative/A-1) are unaffected after the company announced that the European Commission is working on a decision to prohibit UPS' proposed acquisition of TNT Express N.V. Upon such an outcome, UPS would end its offer to buy TNT and pay a termination fee of EUR200 million. Standard & Poor's does not expect the European regulators' decision to have any impact on our ratings on UPS. On Sept. 21, 2012, we downgraded UPS, removed ratings from CreditWatch, and assigned a negative outlook. Our rating action reflected weakened credit metrics because of UPS' increased exposure to multiemployer pension plan contingent liabilities in recent years. We also factored into our downgrade the company's plans to continue to make significant shareholder rewards. Although we now no longer expect UPS to complete the acquisition of TNT, we believe the current ratings and outlook remain appropriate because of UPS' weakened credit metrics and the potential for higher-than-expected shareholder rewards and increased pension contingent liabilities.