Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Acquisition

In March 2020, XPO Logistics Europe announced that it has entered into a definitive agreement to acquire the majority of Kuehne + Nagel’s contract logistics operations in the United Kingdom. The operations provide a range of logistics services, including inbound and outbound distribution, reverse logistics management and inventory management and generated revenues in 2019 of approximately £500 million ($639 million). The transaction is subject to customary closing conditions, including regulatory approvals. The transaction, which is expected to close in the second half of 2020, is not expected to be material to our operating results.

Secured Debt

In April 2020, we and certain of our subsidiaries entered into a Senior Secured Term Loan Credit Agreement (the “Bilateral Credit Agreement”), comprised of a $150 million committed secured term loan facility and a $200 million uncommitted secured evergreen letter of credit facility. The term loan facility is available to be drawn upon, subject to customary conditions, in multiple borrowings within six months of the closing date. Any term loans thereunder will bear interest at a rate equal to LIBOR or base rate, at our election, plus an applicable margin of 3.00% to 4.50%, for LIBOR loans, or 2.00% to 3.50%, for base rate loans, in each case depending upon the time elapsed since the closing date. The term loan facility matures in April 2021.

Letters of credit under the letter of credit facility shall expire within one year of issuance and may contain automatic one-year renewals until the letter of credit facility terminates. As of the date of this Report on Form 10-Q, we have issued $200 million in aggregate face amount of letters of credit, which replaced letters of credit outstanding under our ABL Facility, and have not drawn upon the term loan commitments. The credit agreement governing the term loan and letter of credit facilities contains representations and warranties and affirmative and negative covenants customary for financings of this type as well as customary events of default.

Senior Notes

Also in April 2020, we completed a private placement of $850 million aggregate principal amount of 6.25% senior notes due 2025 (the “Notes”). We intend to use the net proceeds from the issuance of the Notes for general corporate purposes, which may include the repayment of amounts outstanding under our existing ABL Facility, the repayment and/or redemption of our 6.50% senior notes due 2022 and/or the repayment of other existing indebtedness. Interest on the debt is paid semi-annually in arrears. The Notes mature on May 1, 2025. The net proceeds from the offering, after deducting debt issuance costs, were approximately $837 million.

The Notes are guaranteed by each of our direct and indirect wholly-owned restricted subsidiaries (other than some excluded subsidiaries) that are obligors under, or guarantee obligations under, our ABL Facility or existing term loan facility (or certain of its replacements) or guarantee certain of our other indebtedness. The Notes and its guarantees are unsecured, unsubordinated indebtedness for us and our guarantors. The Notes contain covenants customary for notes of this nature.