(Bloomberg) – XPO Logistics Inc.
The trucking company and the warehouse operator will use the bond to repay borrowings under its existing credit agreement, among other things, to pay off a loan to buy up to $ 1
Chief Executive Officer Brad Jacobs said during Friday's fourth-quarter earnings call that XPO's new objective is to buy back stocks rather than pursuing M & A, sending shares lower. The company announced a $ 1 billion share buyback program in December, which was exhausted by Feb. 4. It adopted a new $ 1.5 billion repurchase plan less than two weeks later.
XPO also cut its 2019 profit forecast for Friday the second time in two months, citing the loss of business from its largest customer and softening European demand. Wall Street analyst and industry consultants said that it was certainly Amazon.com Inc., which has been building up its own logistics network, reducing e-commerce giant's Need for third-party providers.
The buybacks are "a negative development for the credit story at this point," CreditSights analyst led by Ashwin Thiruvas, who rates XPO bonds as underperform, said in a note earlier on Tuesday. Equity analysts also have concerns – once Morgan Stanley's top pick for 2019, analyst Ravi Shanker downgraded the stock as the company's change in guidance, "has raised questions about forward visibility," according to a report Tuesday.
XPO, based in Greenwich , Connecticut, also said that it could amend its existing $ 1 billion revolving credit facility by extending its maturity, according to filing. The bond sale was managed by Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co., the person familiar said.
– With the help of Gowri Gurumurthy and Thomas Black
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