RXO has lost its investment-grade credit rating from Moody’s, knocked down one notch to a level below the cutoff below which corporate debt is considered non-investment grade. However, the new Moody’s debt rating for the 3PL, announced Tuesday, is still above the equivalent at S&P Global (NYSE: SPGI). S&P Global’s rating for RXO (NYSE: RXO) is at BB, which is considered one notch less than Ba1, the new rating handed down by Moody’s. The Moody’s (NYSE: MCO) rating had been Baa3, which means that before the reduction there was a two-notch gap between the ratings of the two agencies. That much of a difference is considered unusually wide. window.googletag = window.googletag || {cmd: []}; googletag.cmd.push(function() { googletag.defineSlot(‘/21776187881/FW-Responsive-Main_Content-Slot1’, [[300, 100], [320, 50], [728, 90], [468, 60]], ‘div-gpt-ad-1709668545404-0’).defineSizeMapping(gptSizeMaps.banner1).addService(googletag.pubads()); googletag.pubads().enableSingleRequest(); googletag.pubads().collapseEmptyDivs(); googletag.enableServices(); }); googletag.cmd.push(function() { googletag.display(‘div-gpt-ad-1709668545404-0’); }); The Ba1 rating will be for RXO’s senior unsecured notes, its corporate family rating and its probability of default rating. The Ba1 rating will also be put on the company’s new $400 million senior unsecured notes, a recently-announced financial step by the company. Moody’s already held a negative outlook on RXO; that did not come off with the downgrade. That is a double whammy on RXO, as a negative or positive outlook is a sign that conditions are in place for either a downgrade or upgrade, respectively, in the near to medium term (though the negative outlook on Moody’s has been in place for almost two years.). Once the change in debt rating is actually implemented,…
