Item 1.01 |
Entry into a Material Definitive Agreement |
On March 20, 2024, Xerox Holdings Corporation (the “Company”) completed its previously announced private offering of $500 million aggregate principal amount of 8.875% Senior Notes due 2029 (the “Notes”).
The net proceeds from this offering were approximately $493 million, after deducting the initial purchasers’ commissions and the estimated offering expenses payable by the Company. The Company intends to use the net proceeds of its offering of the Notes together with the net proceeds of the Convertible Notes Offering (as defined in Item 8.01 herein), to (i) refinance all of Xerox Corporation’s outstanding 3.800% Senior Notes due 2024 and $362 million of the Company’s 5.000% Senior Notes due 2025, (ii) repay, redeem or repurchase a portion of the Company’s other outstanding indebtedness and (iii) pay related fees and expenses. The terms of the Notes are governed by an indenture dated as of March 20, 2024 (the “Indenture”), among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
The Notes bear interest at a rate of 8.875% per annum payable semi-annually in arrears on May 30 and November 30 of each year, beginning on November 30, 2024. The Notes are unconditionally guaranteed on a senior unsecured basis by Xerox Corporation and Xerox Business Solutions, LLC and will be unconditionally guaranteed on a senior unsecured basis by certain other wholly owned domestic restricted subsidiaries of the Company that incur certain material indebtedness for borrowed money.
At any time and from time to time prior to November 30, 2026, the Company may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount, plus the applicable “make-whole” premium described in the Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Beginning on November 30, 2026, the Company may redeem some or all of the Notes at any time and from time to time at the applicable redemption prices listed in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time and from time to time prior to November 30, 2026, the Company may redeem up to 40% of the aggregate principal amount of the Notes with funds from one or more equity offerings at a redemption price equal to 108.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
If the Company experiences a Change of Control Triggering Event (as defined in the Indenture), the Company is required to offer to repurchase the Notes at 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The Indenture contains covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other restricted payments, prepay, redeem or repurchase certain subordinated debt, issue certain preferred stock or similar equity securities, make loans and investments, sell or otherwise dispose of assets, incur liens, enter into transactions with affiliates, enter into agreements restricting its subsidiaries’ ability to pay dividends, and consolidate, merge or sell all or substantially all assets.
The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in respect of the Notes, failure to pay certain other indebtedness, failure to pay certain final judgments, failure of certain guarantees to be enforceable and certain events of bankruptcy or insolvency.
The foregoing summary and description of the Indenture and the Notes does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Indenture, which is filed as Exhibit 4.1 hereto and incorporated by reference herein.
Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The disclosure set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
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