Research Update: XPO Inc. Upgraded To 'BB+' From 'BB' On Completion Of Debt Repayment, Divestiture Delay; Outlook Stable

XPO Inc. used proceeds from its RXO Inc. spin-off to repurchase $408 million of unsecured notes bringing the total debt reduction in 2022 to over $1 billion. We expect the company's S&P Global Ratings-adjusted funds from operations (FFO) to debt will be in the low-30% area in 2023 and the high-30% area in 2024. The company also announced on Dec. 2, 2022, its intention to delay the sale of the final business outside of its North American less-than-truckload business in XET, citing challenging European capital markets. We therefore raised our issuer credit rating on XPO to 'BB+' from 'BB' and removed the ratings from CreditWatch, where we placed them with positive implications on June 22, 2022. Additionally, we affirmed our

...- XPO Inc. used proceeds from its RXO Inc. spin-off to repurchase $408 million of unsecured notes bringing the total debt reduction in 2022 to over $1 billion. - We expect the company's S&P Global Ratings-adjusted funds from operations (FFO) to debt will be in the low-30% area in 2023 and the high-30% area in 2024. - The company also announced on Dec. 2, 2022, its intention to delay the sale of the final business outside of its North American less-than-truckload business in XET, citing challenging European capital markets. - We therefore raised our issuer credit rating on XPO to '##+' from '##' and removed the ratings from CreditWatch, where we placed them with positive implications on June 22, 2022. - Additionally, we affirmed our issue-level rating on the company's senior secured term loan and revised the recovery rating to '3' from '2'. - We also raised our issue-level rating to '##-' from 'B+' on the unsecured notes. The recovery rating remains '6'. - We assigned a stable outlook reflecting...

Research Update