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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ XPO Logistics Pays Up to $ 1 Billion for Redemption

XPO Logistics Pays Up to $ 1 Billion for Redemption



(Bloomberg) – XPO Logistics Inc. has paid for the sale of $ 1 billion in bonds to fund share repurchase and debt refinancing as it cancels acquisitions to raise its share price.

bonds to repay loans under their existing credit agreement, among other common corporate purposes such as redemption of shares, a statement said Tuesday. The yield on the securities is 6.75%, the company said. This is above the originally-discussed range between 6.5% and 6.625% for the 5.5-year securities, according to a person familiar with the issue who asked not to be identified because the data is private.

Chief Executive Officer Brad Jacobs said during fourth-quarter earnings in the fourth quarter it reminded that XPO's new goal is to buy back shares instead of mergers and acquisitions, so the shares are down. The company announced a $ 1 billion redemption program in December, which was exhausted by February 4th. It has adopted a new redemption plan worth $ 1.5 billion less than two weeks later.

XPO also cut its earnings forecast for 2019 for the second time in two months, citing the loss of business by its largest customer and mitigating European demand. Although it has not identified the company, which has cut its business by two-thirds, Wall Street analysts and industry consultants said Amazon.com Inc. is likely to build its own logistics network, curtailing giant e-commerce. The need for third-party suppliers

The buy-out is "a negative development of credit history at this point in time," said CreditSights analysts led by Ashwin Tirwasuu, who rated XPO bonds as ineffective, said earlier on Tuesday. Equity analysts are also worried – since Morgan Stanley's 2019 top, analyst Ravi Shanker cuts the value of shares because the change in company leadership "raised questions about visibility ahead," a report said on Tuesday

. , Connecticut, also said it could change its existing $ 1 billion revolving loan by extending its due date, according to submission. Bonds are managed by Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co., the familiar person reports.

– With the help of Gowri Gurumurthy and Thomas Black.

To contact reporters on this story: Molly Smith in New York at msmith604@bloomberg.net, Sebastian Pellehero in New York at spellejero@bloomberg.net

To contact the editors responsible for this story: Nicolas Gameltoft at ngammeltoft@bloomberg.net, Dan Wilchins

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