Xerox offers to exchange $600 million of six notes for cash, new notes

By Wendy Van Sickle

Columbus, Ohio, March 1 – Xerox Corp. announced on Tuesday private offers to exchange six series of its senior notes for cash new notes due March 17, 2022.

Notes from the following series, listed in order of acceptance priority, will be accepted for exchange:

• $1 billion of 6.35% notes due 2018;

• $650 million of 5.625% notes due 2019;

• $500 million of 2.75% notes due 2019;

• $400 million of 2.8% notes due 2020;

• $400 million of 3.5% notes due 2020; and

• $400 million of 2.75% notes due 2020.

The company said in a press releases that if $600 million or more of the existing notes are tendered as of the early participation date, 5 p.m. ET on March 13, it will purchase and exchange tendered existing notes for $300 million cash – plus premiums, if any, and accrued interest – and $300 million of new notes.

Xerox will also pay premiums, if any, and accrued interest in cash.

If less than $600 million principal amount of existing notes is tendered by the early deadline, the company said it will only purchase up to $300 million total principal amount of existing notes for cash.

Xerox also said it expects to issue $300 million of new notes as a result of the exchange offer, but reserves the right to increase that amount.

Tendered notes will be subject to proration.

The cash amount the company will pay for each series of notes will based on a reference U.S. Treasury security plus a fixed spread, which will be:

• For the 6.35% notes due 2018, 1.125% Treasury due Feb. 28, 2019 plus 45 basis points;

• For the 5.625% notes due 2019, 1.125% Treasury due Feb. 28, 2019 plus 120 bps;

• For the 2.75% notes due 2019, 1.125% Treasury due Feb. 28, 2019 plus 95 bps;

• For the 2.8% notes due 2020, 1.375% Treasury due Feb. 15, 2020 plus 120 bps;

• For the 2.35% notes due 2020, 1.375% Treasury due Feb. 15, 2020 plus 125 bps; and

• For the 2.75% notes due 2020, 1.375% Treasury due Feb. 15, 2020 plus 130 bps.

Holders who tender their notes by the early deadline will be eligible to receive a $50 early participation premium for each $1,000 principal amount of notes. Holders who tender after the early deadline will not receive the early participation premium.

The offers will expire at 11:59 p.m. ET on March 27.

Global Bondholder Services Corp. (866-794-2200 or 212-430-3774) is the exchange agent and the information agent for the offers.

Xerox is a maker of office machines is based in Norwalk, Conn.

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