Xerox Holdings Corporation Announces Increase in Maximum Tender Cap for 5.000% Senior Notes Due 2025

Rhea-AI Summary

Xerox Holdings Corporation (XRX) has increased the maximum principal amount for repurchasing its 5.000% Senior Notes due 2025 from $94 million to $362 million under its cash tender offer. The terms for the 2024 Notes Tender Offer remain unchanged. Citigroup Global Markets Inc. is the dealer manager for the Tender Offers.

Insights

Financial Analyst

Increasing the maximum principal amount for the repurchase of senior notes indicates a strategic financial maneuver by Xerox Holdings Corporation to manage its debt portfolio. By raising the repurchase amount from $94 million to $362 million for the 2025 Notes, the company is potentially aiming to reduce future interest expenses and improve its balance sheet ahead of the 2025 maturity date. Such a move could be seen as a proactive approach to debt management, which may be interpreted positively by investors as it could improve the company's creditworthiness and potentially lead to an improved credit rating.

However, the impact on the stock market will depend on investors' perceptions of the company's long-term financial strategy and the opportunity cost of using cash for the repurchase instead of other investments or growth opportunities. The repurchase could also indicate that the company views its stock as undervalued or that it believes the repurchase of debt is the best use of its cash at this time. The financial implications of such debt restructuring should be analyzed in the context of the company's overall capital structure and interest rate forecasts.

Market Research Analyst

The decision by Xerox to modify the terms of its tender offer for the 2025 Notes could reflect broader market conditions. For instance, if the market interest rates are expected to decline, repurchasing high-interest debt like the 5.000% Senior Notes makes financial sense as it could reduce the cost of capital. Conversely, if interest rates are expected to rise, the company might be seizing the opportunity to lock in lower interest costs before rates escalate further.

Market sentiment towards corporate debt repurchases often hinges on the company's rationale for such actions. If the repurchase is seen as a sign of financial strength and prudent liability management, it could bolster investor confidence. On the other hand, if the market interprets this as a move to mask underlying operational weaknesses, the reaction could be less favorable. Monitoring peer actions and industry trends is crucial to understand the strategic significance of Xerox's move within the context of the technology and document management services sector.

Debt Capital Markets Expert

In the debt capital markets, a company's decision to increase the principal amount it is willing to repurchase in a tender offer can have several implications. For Xerox, this could mean that the initial response to the tender offer was stronger than anticipated, prompting the company to repurchase more of its debt. This could be a signal to the market of a strong demand for the company's debt, or conversely, it could indicate that Xerox is taking advantage of a favorable debt market to reduce its outstanding obligations.

It is also important to consider the role of the dealer manager, in this case, Citigroup Global Markets Inc. and the tender and information agent, Global Bondholder Services Corporation. Their involvement suggests a well-structured and professionally managed process, which can reassure bondholders about the legitimacy and efficiency of the tender offer. The dynamics of the tender offer, including the acceptance priority level and pricing mechanisms, would be key factors in evaluating the success of the offer and its impact on the company's financial strategy.

NORWALK, Conn.--(BUSINESS WIRE)-- Xerox Holdings Corporation (NASDAQ: XRX) today announced that it has increased the maximum principal amount of its $750 million aggregate principal amount outstanding of 5.000% Senior Notes due 2025 (the “2025 Notes”) that it can repurchase under its previously announced cash tender offer for the 2025 Notes (the “2025 Notes Tender Offer”) from $94 million to $362 million, on the terms and subject to the conditions set forth in the related Offer to Purchase dated March 4, 2024 (the “Offer to Purchase”). The terms of the previously announced cash tender offer by Xerox Corporation for its 3.800% senior notes due 2024 (the “2024 Notes Tender Offer” and, together with the 2025 Notes Tender Offer, the “Tender Offers”) remain unchanged.

The complete terms and conditions of the Tender Offers are set forth in the Offer to Purchase, as modified by this press release.

Citigroup Global Markets Inc. is the dealer manager for the Tender Offers. Investors with questions regarding the Tender Offers may contact Citigroup Global Markets Inc. at (800) 558-3745 (toll-free). Global Bondholder Services Corporation is the tender and information agent for the Tender Offers and can be contacted at (855) 654-2014 (toll-free) or (212) 430-3774 (collect).

The Tender Offers are being made solely by means of the Offer to Purchase, as modified by this press release. This press release shall not constitute an offer to purchase or a solicitation of an offer to purchase any securities, nor shall it constitute an offer, solicitation or sale of any securities in any state or jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful.

About Xerox Holdings Corporation (NASDAQ: XRX)

For more than 100 years, Xerox has continually redefined the workplace experience. Harnessing our leadership position in office and production print technology, we’ve expanded into software and services to sustainably power the hybrid workplace of today and tomorrow. Today, Xerox is continuing its legacy of innovation to deliver client-centric and digitally-driven technology solutions and meet the needs of today’s global, distributed workforce. From the office to industrial environments, our differentiated business and technology offerings and financial services are essential workplace technology solutions that drive success for our clients. At Xerox, we make work, work.

Forward-Looking Statements

This release and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “should”, “targeting”, “projecting”, “driving” and similar expressions, as they relate to us, our performance and/or our technology, are intended to identify forward-looking statements. These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. Such factors include but are not limited to: risks and uncertainties related to the completion of the Tender Offers on the anticipated terms or at all, applicable market conditions, the satisfaction of customary closing conditions related to Tender Offers (including the financing condition), global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts, including the current conflict between Russia and Ukraine; our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Reinvention; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, trade protection measures, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of borrowing, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anticorruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; and other factors as set forth from time to time in the company’s Securities and Exchange Commission filings, including the company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The company intends these forward-looking statements to speak only as of the date of this release and does not undertake to update or revise them as more information becomes available, except as required by law.

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Xerox® is a trademark of Xerox in the United States and/or other countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240305786171/en/

Media Contact:

Justin Capella, Xerox, +1-203-258-6535, Justin.Capella@xerox.com

Investor Contact:

David Beckel, Xerox, +1-203-849-2318, David.Beckel@xerox.com

Source: Xerox Holdings Corporation

FAQ

What is the maximum principal amount that Xerox Holdings Corporation can repurchase for its 5.000% Senior Notes due 2025?

Xerox Holdings Corporation can repurchase up to $362 million of its 5.000% Senior Notes due 2025.

Who is the dealer manager for the Tender Offers by Xerox Holdings Corporation?

Citigroup Global Markets Inc. is the dealer manager for the Tender Offers by Xerox Holdings Corporation.

How can investors contact Citigroup Global Markets Inc. regarding the Tender Offers?

Investors can contact Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) regarding the Tender Offers.

Who is the tender and information agent for the Tender Offers by Xerox Holdings Corporation?

Global Bondholder Services Corporation is the tender and information agent for the Tender Offers by Xerox Holdings Corporation.

Is this press release an offer to purchase securities?

No, this press release is not an offer to purchase securities.

What is the ticker symbol for Xerox Holdings Corporation?

The ticker symbol for Xerox Holdings Corporation is XRX.