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AAA RATING GONE
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NEW YORK, Dec 20 (Reuters) - Moody's Investors Service on Thursday cut its ratings on United Parcel Service Inc (UPS.N: Quote, Profile, Research), leaving only five non-financial U.S. companies retaining their highest rating.
Moody's cut UPS' senior unsecured debt two notches from "Aaa" to "Aa2," the third highest investment grade, citing the company's higher debt to fund the withdrawal from a pension plan as well as continuing shareholder enhancement plans.
The downgrade leaves Automatic Data Processing Inc (ADP.N: Quote, Profile, Research), Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research), Exxon Mobil Corp (XOM.N: Quote, Profile, Research), General Electric (GE.N: Quote, Profile, Research) and Johnson & Johnson (JNJ.N: Quote, Profile, Research) as the only U.S. companies outside of the financial sector still holding the highest investment grade rating from Moody's.
UPS IS TAKING ON DEBT TO FUND WITHDRAWALS FROM A MULTI-EMPLOYER PENSION PLAN (MEPP) IN SOME STATES, Moody's said in a statement.
The amount of the payment required to withdraw from the MEPP was considerably larger than Moody's had anticipated when UPS was rated "Aaa", the credit ratings agency said.
Moody's cut UPS' senior unsecured debt two notches from "Aaa" to "Aa2," the third highest investment grade, citing the company's higher debt to fund the withdrawal from a pension plan as well as continuing shareholder enhancement plans.
The downgrade leaves Automatic Data Processing Inc (ADP.N: Quote, Profile, Research), Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research), Exxon Mobil Corp (XOM.N: Quote, Profile, Research), General Electric (GE.N: Quote, Profile, Research) and Johnson & Johnson (JNJ.N: Quote, Profile, Research) as the only U.S. companies outside of the financial sector still holding the highest investment grade rating from Moody's.
UPS IS TAKING ON DEBT TO FUND WITHDRAWALS FROM A MULTI-EMPLOYER PENSION PLAN (MEPP) IN SOME STATES, Moody's said in a statement.
The amount of the payment required to withdraw from the MEPP was considerably larger than Moody's had anticipated when UPS was rated "Aaa", the credit ratings agency said.