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XPO Logistics pays up to $ 1 billion to repurchase shares



(Bloomberg) – XPO Logistics Inc. pays up to $ 1 billion in bonds to fund share repurchases and refinance debt as it waives takeovers to boost its share price.

The Freight Forwarder and the Warehouse Operator Will Use It The debt repayment debt under its existing loan agreement is intended, among other general corporate purposes such as the repurchase of shares, according to a statement on Tuesday. The 5.5-year securities, which can not be repurchased for 2.5 years, are said to be 6.75 percent above the initially discussed range of 6.5, according to a person familiar with the matter who was not to be identified and move 6.625 percent The details are private.

Chief executive officer Brad Jacobs said in the fourth quarter on Friday that XPO's new goal is to buy back shares instead of tracking M & A and lower stocks. The company announced a $ 1 billion share repurchase program in December, which was exhausted by 4 February. Less than two weeks later, it passed a $ 1.5 billion repurchase plan.

XPO also lowered its earnings forecast for 2019 for the second time, citing the loss of its largest customer's business and a weakening of European demand. While the company, which did not constrain the company by two-thirds, could not be identified, Wall Street analysts and industry advisors said it was certainly Amazon.com Inc., which built its own logistics network and reduced the number of e-commerce companies. Commerce giants reduced need for third party suppliers.

The repurchases are "a negative development for the credit story at this point," said CreditSights analysts, led by Ashwin Tiruvasu, who called XPO bonds underperformance, in a note on Tuesday. Stock analysts also have concerns: After Morgan Stanley made the best choice in 2019, analyst Ravi Shanker downgraded the stock as the company's guidance raises "questions on visibility," a Tuesday report said.

XPO, based in Greenwich, Connecticut, also said that it could change its existing $ 1 billion revolving credit facility by extending its term, according to the statement. The sale of the bonds is managed by Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co., said the well-known person.

(Price updates in the second paragraph.)

– With support from Gowri Gurumurthy and Thomas Black.

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

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Sally Bakewell, Dan Wilchins

For more articles of this nature, visit bloomberg. com

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