RXO, Inc.RXO
RXO, Inc. Debt Disclosure
Debt
The following table summarizes the principal balance and carrying value of our debt:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| (In millions) | Principal Balance | Carrying Value | Principal Balance | Carrying Value | ||||||||||||||||||||||
| Revolver | $ | 35 | $ | 35 | $ | — | $ | — | ||||||||||||||||||
7.50% Notes due 2027 (1) | 355 | 351 | 355 | 349 | ||||||||||||||||||||||
| Finance leases, asset financing and short-term debt | 18 | 18 | 19 | 19 | ||||||||||||||||||||||
| Total debt and obligations under finance leases | 408 | 404 | 374 | 368 | ||||||||||||||||||||||
| Less: Short-term debt and current maturities of long-term debt | 17 | 17 | 17 | 17 | ||||||||||||||||||||||
| Total long-term debt and obligations under finance leases | $ | 391 | $ | 387 | $ | 357 | $ | 351 | ||||||||||||||||||
(1) The carrying value of the 7.50% Notes due 2027 is presented net of unamortized debt issuance cost and discount of $4 million and $6 million as of December 31, 2025 and December 31, 2024, respectively.
Our principal payment obligations on debt (excluding finance leases) for the next five years and thereafter is as follows:
| (In millions) | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||||
| Principal payments on debt | $ | 15 | $ | 355 | $ | — | $ | 35 | $ | — | $ | — | ||||||||||||||||||||||||||
Notes
On October 25, 2022, we completed an offering of $355 million in aggregate principal amount of unsecured notes (the “Notes” or the “7.50% Notes due 2027”). The Notes bear interest at a rate of 7.50% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023, and mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable. The Notes were issued at an issue price of 98.962% of par. The effective interest rate on the Notes was 8.13% as of December 31, 2025.
We may redeem the Notes, in whole or in part, at any time at a redemption price equal to (i) 101.875% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2025 and (ii) 100% of the principal amount to be redeemed if the redemption occurs on or after November 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The Notes are guaranteed by each of our direct and indirect wholly-owned domestic subsidiaries (other than certain excluded subsidiaries). The Notes and their guarantees are unsecured, senior indebtedness for us and our guarantors. The Notes contain covenants customary for debt securities of this nature. At December 31, 2025, the Company was in compliance with the covenants of the Notes.
Revolving Credit Facilities
On October 18, 2022, we entered into a five-year, $500 million, unsecured multi-currency revolving credit facility (the “Revolver”), with $50 million available for the issuance of letters of credit. Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company’s credit ratings, with interest payable quarterly. The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement. The effective interest rate on the Revolver was 5.40% as of December 31, 2025.
On November 2, 2023, the Company exercised a feature to increase the total commitments under the Revolver from $500 million to $600 million.
The covenants in the Revolver are customary for financings of this type. The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00:1.00. On August 8, 2024, the Company and lenders entered into an amendment, which, following the completion of the Coyote acquisition on September 16, 2024, increased the Company’s maximum consolidated leverage ratio to not greater than 4.50:1.00. At December 31, 2025, the Company was in compliance with the covenants of the Revolver. There were no letters of credit outstanding on the Revolver at December 31, 2025.
In addition, the amendment extended, upon the completion date of the Coyote acquisition, the Revolver maturity date five years from the amendment date to September 16, 2029. To the extent there is more than $50 million of the Company’s Notes outstanding on the date that is 91 days prior to the earlier of the extended maturity date and the maturity date of the Notes, then the extended maturity date will be subject to a springing earlier maturity date that is 91 days prior to the earlier of the extended maturity date and the Notes maturity date, unless the Notes are refinanced or replaced with debt that matures at least 91 days after the extended maturity date.
As of December 31, 2025, the Company had $565 million committed under the Revolver, net of outstanding borrowings. As of December 31, 2025, the Company’s available borrowing capacity under the Revolver, after giving effect to the financial covenants described above, was $202 million.
In connection with entering into the ABL Facility, on February 5, 2026, the existing Revolver was fully repaid and terminated.
We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $17 million. This facility has a one-year term and we had $15 million outstanding as of December 31, 2025 classified as short-term debt.
Letters of Credit
The Company maintains a bilateral unsecured letter of credit facility. As of December 31, 2025, we had $41 million in aggregate face amount of letters of credit outstanding under the facility.
ABL Facility
On February 5, 2026, we entered into an asset-based five-year revolving credit facility (the “ABL Facility”) in an amount of up to $450 million, with the option to request an increase in the revolving commitment by up to the greater of $200 million and the amount, if positive, by which the borrowing base exceeds the aggregate commitments of the lenders, not to exceed 5% of the aggregate amount of the commitments of the lenders at such time. A portion of the ABL Facility, not to exceed $100 million, is available for the issuance of letters of credit. On February 5, 2026, the $41 million in aggregate face amount of letters of credit outstanding described above were converted into letters of credit issued and outstanding under the ABL Facility. The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.
Proceeds from loans under the ABL Facility were used to repay and terminate the existing Revolver.
The ABL Facility is secured by a first priority perfected security interest (subject to customary exceptions) in all assets of the credit parties, whether consisting of personal, tangible or intangible property; provided that all interests in fee-owned real property and all leasehold interests in real property are excluded.
Amounts available to be drawn under the ABL Facility are determined by calculating the applicable borrowing base, which is based upon applicable percentages of the values of eligible investment grade accounts receivable, eligible non-investment grade accounts receivable, eligible unbilled accounts receivable, and eligible liquid assets, less reserves.
Outstanding amounts under the ABL Facility bear interest at a rate per annum equal to, at the Company’s election: (i) a base rate plus an applicable margin or (ii) an adjusted term SOFR plus an applicable margin; interest is payable quarterly.
Subject to customary exceptions and restrictions, the Company may voluntarily prepay outstanding amounts under the ABL Facility at any time without premium or penalty. Any voluntary prepayments made will not reduce commitments under the ABL Facility. The ABL Facility contains mandatory prepayment provisions which require prepayment of amounts outstanding under the ABL Facility (i) upon the receipt of proceeds from the issuance of any non-permitted indebtedness and (ii) when there is an availability shortfall.
The ABL Facility contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including, but not limited to, financial covenants relating to a fixed charge coverage ratio, a minimum liquidity requirement and a minimum excess availability requirement, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 9, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 24, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.