Moody's changes RXO outlook to negative

Moody's Ratings said it affirmed RXO, Inc.'s senior unsecured rating of Baa3 and changed the outlook to negative from stable.

“The negative outlook reflects Moody's view that RXO's credit metrics will be weak through the remainder of 2024 given the prolonged weakness in the freight transportation sector that will not improve materially until the second half of 2024. Moody's forecasts that RXO's debt to EBITDA at year-end 2024 will be about 2.9x.

“Additionally, Moody's estimates that the company does not have full access to its $600 million revolver currently due to covenant restrictions. While this limits the company's available liquidity, RXO does not typically rely on its revolver for operations,” the agency said in a press release.

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