Moody’s Ratings upgraded XPO, Inc.’s corporate family rating to Ba1 from Ba2 on Monday, citing sustained margin expansion and stronger credit metrics amid a still-recovering freight market.
The upgrade also lifted the company’s senior secured bank credit facility and senior secured notes to Baa3 from Ba1, and its senior unsecured notes to Ba2 from Ba3. Moody’s speculative grade liquidity rating was raised to SGL-1 from SGL-2.
Moody’s attributed the rating change to XPO’s execution of a multi-year operating improvement plan, which has delivered consistent earnings growth and reduced leverage. For the 12 months ended June 30, 2026, Moody’s-adjusted debt-to-EBITDA fell to approximately 2.8x, down from higher levels in prior periods. The company reported a 10% year-over-year increase in consolidated revenue in the first half of 2026.
Projected leverage is expected to decline further to about 2.6x in 2026 and around 2.2x in 2027, while EBITDA margins are forecast to remain above 17%. XPO has repaid $200 million of term-loan principal year-to-date in 2026 and maintains a fully available $600 million revolving credit facility. As of June 30, 2026, the company held $298 million in cash and had $69 million available under its $200 million letters of credit facility.
The upgrade follows operational improvements across XPO’s North American less-than-truckload network, including higher yields, positive volume growth, and AI-driven labor productivity gains. Moody’s noted that XPO has also benefited from the integration of service centers acquired from the former Yellow Corporation, which has supported cost efficiencies and asset utilization.
XPO is evaluating the potential divestiture of its European transportation platform, a move that could reduce business diversification but accelerate debt reduction efforts. The company faces no significant debt maturities until 2028.
