RXO starts roadshow for $350 million five-year notes backing spinoff from XPO Logistics

By Paul A. Harris

Portland, Ore., Oct. 11 – RXO, Inc. began a roadshow on Tuesday for a $350 million offering of five-year senior notes (Baa3/BB+) backing XPO Logistics, Inc.'s spinoff of its tech-enabled brokerage platform, according to market sources.

Initial guidance has the notes coming at a discount to yield 7¾% to 8%, sellside sources say.

The Rule 144A and Regulation S for life deal, which was scheduled to kick off on a Tuesday investor call, will be marketed on a roadshow through Wednesday and is set to price thereafter.

BofA Securities Inc. is the left bookrunner. Citigroup Global Markets Inc., Barclays, Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC are the joint bookrunners.

The notes become callable after two years at par plus 50% of the coupon. They feature a 40% equity clawback during the non-call period and have a 101% poison put.

Proceeds will be used to fund a cash distribution to XPO Parent in connection to the spinoff and/or to provide working capital.

The issuing entity will be XPO Escrow Sub, LLC, to be joined by RXO, Inc. when the spinoff is concluded.

The Greenwich, Conn.-based company is a brokered transportation platform. Its core component is its truck brokerage business.

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