NORWALK, Conn. - Xerox (NASDAQ:XRX) Holdings Corporation (NASDAQ:XRX) announced its plans to offer $300 million in convertible senior notes through a private placement aimed at qualified institutional buyers, according to a statement released today. The technology giant also intends to provide an option to purchase up to an additional $45 million in notes.
The offering's proceeds are earmarked for funding capped call transactions, refinancing existing senior notes due in 2024 and 2025, covering related fees and expenses, and for general corporate purposes. The 2024 notes currently have $300 million outstanding, while the 2025 notes have $750 million outstanding.
Convertible into cash, shares of Xerox's common stock, or a combination thereof at the company's discretion, the notes will be senior, unsecured obligations with semi-annual interest payments. The specific terms, including the interest rate and conversion rate, will be determined at the time of the offering's pricing. The notes are set to mature on March 15, 2030, and may be redeemed by Xerox starting September 20, 2027, under certain conditions related to the company's stock price.
In conjunction with the note pricing, Xerox plans to enter into capped call transactions with financial institutions to potentially minimize dilution from the conversion of the notes or offset cash payments required. These transactions are subject to a cap to be determined upon the offering's pricing.
The company has been advised that the financial institutions, or their affiliates, may engage in transactions that could affect the market price of Xerox's common stock or the notes. These may include purchasing shares, establishing initial hedges, unwinding various derivative transactions, and secondary market activities.
The notes, their guarantees, and the shares of common stock potentially issued upon conversion have not been registered under the Securities Act of 1933 or any state securities laws. They will be offered only to qualified institutional buyers in compliance with Rule 144A under the Act.
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