Xerox Holdings Corp Announces Successful Pricing of $800 Million Senior Secured Notes
On March 28, 2025, Xerox Corporation revealed that it has successfully priced an offering of $800 million in Senior Secured Notes, a strategic move that underscores the company’s ongoing efforts to optimize its capital structure and finance future growth initiatives.
1. Breakdown of the Offering
The offering consists of two distinct categories of notes:
- First Lien Notes: $400 million of 10.250% Senior Secured First Lien Notes due 2030.
- Second Lien Notes: $400 million of 13.500% Senior Secured Second Lien Notes due 2031.
The First Lien Notes will be issued by Xerox Corporation and guaranteed by Xerox Holdings Corporation and certain subsidiaries. In contrast, the Second Lien Notes will be issued by Xerox Issuer Corporation, a wholly-owned subsidiary of Xerox Corporation.
The Notes are set to be issued on April 11, 2025, pending the satisfaction of customary closing conditions, allowing the company to secure necessary funding for upcoming strategic initiatives.
2. Intended Use of Proceeds
The net proceeds from the offering of the First Lien Notes will primarily be allocated towards the redemption of $90 million of Xerox’s existing 5.000% Senior Notes due 2025. This includes redemption premiums and accrued interest, with plans to redeem the remaining amount on or before maturity. Additionally, Xerox intends to utilize part of these proceeds for general corporate purposes, including the repayment of $95 million in borrowings under its first lien senior secured term loan credit facility.
Meanwhile, the proceeds from the Second Lien Notes will further support Xerox’s proposed acquisition of Lexmark International II, LLC. The Lexmark Acquisition, initially announced on December 22, 2024, will involve funding a portion of the purchase price and the repayment of substantially all of Lexmark’s outstanding debt, alongside covering fees and expenses related to the acquisition and the ongoing offering.
3. Regulatory and Market Conditions
The Notes and their guarantees are being marketed to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as well as to certain non-U.S. persons in accordance with Regulation S. It’s important to note that these securities have not been registered under the Securities Act or any state securities laws and cannot be offered or sold in the United States without proper registration or exemption.
4. About Xerox Holdings Corporation
Established over a century ago, Xerox has continuously evolved to redefine the workplace experience. The company leverages its expertise in office and production print technology to provide a comprehensive suite of services that facilitate digital transformation and operational excellence for businesses worldwide.
Xerox aims to remain at the forefront of innovation, adapting its offerings to meet the needs of a rapidly changing global workforce. With advanced AI-driven technologies, the company is well-positioned to support its clients in navigating the complexities of today’s business landscape.
5. Looking Ahead
As Xerox executes its strategic plans, including the acquisition of Lexmark and the refinancing of existing debt, market observers will be keenly watching how these initiatives will impact the company’s financial performance and operational capabilities in the coming years. With the successful pricing of these senior secured notes, Xerox is taking significant steps towards strengthening its financial foundation and enhancing its competitive position in the market.
