Debt

The Company's debt is comprised of the following:



	September 30, 2017
					Fair Value
(In millions)	Principal Balance		Carrying Value		Level 1		Level 2
ABL facility	$	—	$	—	$	—	$	—
Senior notes due 2023	535.0		527.7		560.4		—
Senior notes due 2022	1,600.0		1,582.2		1,686.6		—
Senior notes due 2021	590.3		584.4		619.8		—
Term loan facility	1,494.0		1,453.3		—		1,501.4
Senior debentures due 2034	300.0		202.3		299.9		—
Convertible senior notes	4.7		4.7		19.4		—
Euro private placement notes due 2020	14.2		15.2		—		14.8
Asset financing	95.8		95.8		92.6		—
Capital leases for equipment	165.4		165.4		—		165.4
Total debt	$	4,799.4	$	4,631.0	$	3,278.7	$	1,681.6
Current maturities of long-term debt	$	90.0	$	90.0
Long-term debt	$	4,709.4	$	4,541.0



	December 31, 2016
					Fair Value
(In millions)	Principal Balance		Carrying Value		Level 1		Level 2
ABL facility	$	30.0	$	30.0	$	—	$	30.0
Senior notes due 2023	535.0		527.1		560.4		—
Senior notes due 2022	1,600.0		1,579.9		1,689.4		—
Senior notes due 2021	527.1		520.7		546.0		—
Senior notes due 2018	265.8		267.1		274.0		—
Term loan facility	1,481.9		1,439.2		—		1,507.1
Senior debentures due 2034	300.0		200.8		241.6		—
Convertible senior notes	49.4		47.1		129.8		—
Euro private placement notes due 2020	12.6		13.7		—		14.0
Asset financing	145.0		145.0		145.0		—
Capital leases for equipment	97.4		97.4		—		97.4
Total debt	$	5,044.2	$	4,868.0	$	3,586.2	$	1,648.5
Current maturities of long-term debt	$	138.9	$	136.5
Long-term debt	$	4,905.3	$	4,731.5

The Level 1 debt was valued using quoted prices in active markets. The Level 2 debt was valued using bid evaluation pricing models or quoted prices of securities with similar characteristics. The fair value of the asset financing arrangements approximates carrying value since the debt is primarily issued at a floating rate, may be prepaid any time at par without penalty, and the remaining life is short-term in nature.

Refinancing of Existing Term Loan

On March 10, 2017, the Company entered into a Refinancing Amendment (Amendment No. 2 to Credit Agreement) (the "Amendment"), by and among XPO, its subsidiaries signatory thereto, as guarantors, the lenders party thereto and Morgan Stanley Senior Funding, Inc., in its capacity as administrative agent (the "Administrative Agent"), amending that certain Senior Secured Term Loan Credit Agreement, dated as of October 30, 2015 (as amended, amended and restated, supplemented or otherwise modified, including by that certain Incremental and Refinancing Amendment (Amendment No. 1 to Credit Agreement), dated as of August 25, 2016, the "Term Loan Credit Agreement").

Pursuant to the Amendment, the outstanding $1,481.9 million principal amount of term loans under the Term Loan Credit Agreement (the "Existing Term Loans") were replaced with $1,494.0 million in aggregate principal amount of new term loans (the "New Term Loans") having substantially similar terms as the Existing Term Loans, other than with respect to the applicable interest rate and prepayment premiums in respect of certain voluntary prepayments. Proceeds from the New Term Loans were used primarily to refinance the Existing Term Loans and to pay interest, fees and expenses in connection therewith, and up to $1.5 million may be used for general corporate purposes.

The interest rate margin applicable to the New Term Loans was reduced from 2.25% to 1.25%, in the case of base rate loans, and from 3.25% to 2.25%, in the case of LIBOR loans and the LIBOR floor was reduced from 1.0% to 0%. The interest rate on the New Term Loans was 3.55% at September 30, 2017. The New Term Loans maturity date remains October 30, 2021. The refinancing resulted in a debt extinguishment charge of $8.3 million during the nine months ended September 30, 2017.

Redemption of Senior Notes due 2018

In August 2017, the Company redeemed all of its outstanding 7.25% senior notes due January 2018 (the “Notes”). The redemption price for the Notes was 102.168% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the date of redemption. The redemption was funded using cash on hand at the date of the redemption. The loss on debt extinguishment was approximately $5 million.

Convertible Senior Notes

During the nine months ended September 30, 2017, the Company issued an aggregate of approximately 2.7 million shares of the Company’s common stock to certain holders of the Convertible Senior Notes in connection with the conversion of $44.7 million aggregate principal amount of the Convertible Senior Notes. The conversions were allocated to long-term debt and equity in the amounts of $44.4 million and $44.8 million, respectively. A loss on conversion of $0.5 million was recorded as part of these transactions. Certain of these transactions represented induced conversions pursuant to which the Company paid the holder a market-based premium in cash. The negotiated market-based premiums, in addition to the difference between the current fair value and the book value of the Convertible Senior Notes, were reflected in interest expense.