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S&P rates RXO, new notes BB+
S&P said it assigned its BB+ issuer credit rating to RXO Inc. and a BB+ issue-level rating and 3 recovery rating (rounded estimate: 60%) to the company's proposed unsecured notes.
The outlook is positive.
Freight broker RXO intends to spin off from XPO Logistics Inc. As part of the spinoff, RXO will issue debt to fund a one-time dividend to XPO.
“The positive outlook reflects our expectation that credit metrics should improve in the 12 months following the close of the transaction with funds from operations (FFO) to debt increasing to around 60% in 2024 from around 50% in 2022, despite a weaker macroeconomic environment, as the company continues to increase its market share and benefit from its proprietary technology,” S&P said in a news release.
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