Xerox signs new $300 million five-year ABL with Citibank

By William Gullotti

Buffalo, N.Y., May 23 – Xerox Corp. and its parent company, Xerox Holdings Corp., signed a $300 million asset-based senior secured revolving credit facility with Citibank, NA as administrative agent on May 22, according to an 8-K filing with the Securities and Exchange Commission.

The new ABL, which matures May 22, 2028, includes an uncommitted $250 million accordion feature and a $100 million letter-of-credit subfacility.

Borrowings will bear interest at SOFR plus a margin ranging from 150 basis points to 200 bps. There is also a commitment fee of either 25 bps or 37.5 bps.

The margin and fee are both determined by the amounts borrowed/available under the facility.

At closing, the applicable margin through the quarterly reporting for the fiscal quarter ending Dec. 31, 2023, is 200 bps, which indicates a commitment fee of 37.5 bps.

The ABL requires Xerox to comply with a springing fixed-charge coverage ratio measured as of the end of each fiscal quarter during which excess availability is less than an amount equal to the greater of (A) $22.5 million and (B) 10% of the line cap. The ABL also contains negative covenants governing dividends, investments, indebtedness and other matters customary for similar facilities.

If an event of default occurs under the ABL, the entire principal amount outstanding, together with all accrued unpaid interest and other amounts owed, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods.

On May 17, Xerox terminated an existing $250 million credit agreement dated July 7, 2022 and also with Citibank as administrative agent. The commitments under the terminated facility were never drawn.

In addition to serving as administrative agent, Citibank is the swingline lender, as well as a joint lead arranger and joint bookrunner with Credit Agricole CIB.

Citibank is also the collateral agent, with PNC Bank, NA acting as co-collateral agent.

Xerox is a Norwalk, Conn.-based supplier of print and digital document products and services.

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