Minimum new note condition satisfied
Xerox (NYSE: XRX) announced today the early results of its offer
to purchase $300 million in debt and exchange an additional $300
million of existing debt for new notes due 2022 (the “new
notes”).
The early results of the private offers (the “offers”) to
exchange certain existing notes are listed in the table below. The
minimum new note condition (as defined in the offering memorandum
as defined below) has been satisfied.
The approximate principal amount of the existing notes validly
tendered for exchange and not validly withdrawn, as of 5:00 p.m.
ET, on March 13, 2017 (the “early participation date”), based on
information provided by the exchange agent to Xerox, is
approximately $720 million, as described in greater detail in the
table below. Since more than $600 million principal amount of
existing notes were validly tendered (and not validly withdrawn) as
of the early participation date, the minimum new note condition (as
defined in the offering memorandum as defined below) has been
satisfied. Xerox will purchase and exchange tendered existing notes
for $300 million of cash and $300 million aggregate principal
amount of new notes (in each case, exclusive of premiums to par, if
any, and accrued and unpaid interest that also will be paid in
cash). Based on the acceptance priority levels, the 2.750% notes
due 2020 (as defined below) have an acceptance priority level 6 and
will be subject to a proration factor of approximately 17%.
The terms and conditions of the offers are described in an
offering memorandum dated February 28, 2017 (as it may be amended
or supplemented from time to time, the “offering memorandum”) and
the accompanying letter of transmittal (as it may be amended or
supplemented from time to time, the “letter of transmittal” and,
together with the offering memorandum, the “offer documents”). Each
offer may be individually amended, extended, terminated or
withdrawn without amending, extending, terminating or withdrawing
any other offer.
The following table sets forth certain terms of the offers and
the principal amount of each series of existing notes that has been
validly tendered and not validly withdrawn pursuant to the offers
as of the early participation date:
Hypothetical Early Participation Payment per $1,000
1, 2 CUSIP Number Title of Series
Aggregate PrincipalAmountOutstanding
Reference U.S.Treasury Security
Bloomberg Reference Page
Fixed Spread (basis points)
AcceptancePriorityLevel1
Principal Amount Tendered
for Exchange as of Early Participation Date
NewNotes Principal Amount
Cash Consideration
984121BW2 6.350% Senior Notes due 2018 (the “6.350% notes”)
$1,000,000,000 1.125% U.S. Treasury due 02/28/2019 PX1 45 1
$260,001,000 $500 $553.80 984121CA9 5.625% Senior Notes due 2019
(the “5.625% notes”) $650,000,000 1.125% U.S. Treasury due
02/28/2019 PX1 120 2 $96,362,000 $500 $585.12 984121CG6 2.750%
Senior Notes due 2019 (the “2.750% notes due 2019”) $500,000,000
1.125% U.S. Treasury due 02/28/2019 PX1 95 3 $94,016,000 $500
$511.65 984121CH4 2.800% Senior Notes due 2020 (the “2.800% notes”)
$400,000,000 1.375% U.S. Treasury due 02/15/2020 PX1 120 4
$87,236,000 $500 $504.32 984121CM3 3.500% Senior Notes due 2020
(the “3.500% notes”) $400,000,000 1.375% U.S. Treasury due
02/15/2020 PX1 125 5 $37,802,000 $500 $525.79 984121CK7 2.750%
Senior Notes due 2020 (the “2.750% notes due 2020”) $400,000,000
1.375% U.S. Treasury due 02/15/2020 PX1 130 6 $145,014,000 $500
$499.80 1. Since at least
$600 million in principal amount of existing notes were tendered by
the early participation date, Xerox will purchase $300 million
aggregate principal amount of existing notes for cash as described
herein and also issue $300 million in new notes in exchange for an
additional $300 million of existing notes. Premiums to par, if any,
and all accrued and unpaid interest on accepted existing notes will
also be paid in cash; accordingly, the amount of cash used to
complete the offers will exceed $300 million. The amount of each
series of existing notes to be purchased and exchanged for the
applicable consideration will be determined in accordance with
applicable acceptance priority level, subject to proration as
discussed below. 2. To be paid in cash and new notes per $1,000
principal amount of existing notes accepted for purchase and
exchange. Hypotheticals shown for illustrative purposes only. Cash
prices will be determined on the payment determination date. The
cash payment shown above includes hypothetical applicable premium
to par, if any, but excludes accrued and unpaid interest, which
will be paid in cash in addition to the early participation
payment.
The offers will expire at 11:59 p.m. ET on March 27, 2017,
unless extended (such date and time, as they may be extended, the
“expiration date”). To be eligible to receive the early
participation payment, eligible holders had to validly tender (and
not withdraw) their existing notes prior to 5:00 p.m. ET on March
13, 2017 (the “withdrawal deadline”). In accordance with the terms
of the offers, tendered existing notes may no longer be validly
withdrawn, except in certain limited circumstances where additional
or extended withdrawal rights are required by law. Xerox reserves
the right, but not the obligation, to elect to accept for purchase
and exchange existing notes validly tendered at or prior to the
early participation date, and not validly withdrawn prior to the
withdrawal deadline, in accordance with the terms of the offers,
provided that all conditions to the offers have been satisfied or
waived by Xerox, on any date following the early participation date
but prior to the expiration date (the “early acceptance date”).
Xerox does not expect to accept for purchase and exchange any
existing notes tendered after the early participation date.
Existing notes accepted on the early acceptance date may be settled
on the business day Xerox chooses promptly thereafter, which Xerox
anticipates will be March 17, 2017 (the “initial settlement
date”).
The offers are subject to the satisfaction or waiver of certain
conditions, and Xerox may waive these conditions in its sole
discretion prior to the expiration date. The offers are not
conditioned upon a minimum amount of existing notes of any series,
or a minimum amount of existing notes of all series, being
tendered. The purpose of the offers is to reduce the principal
amount of outstanding debt securities of Xerox held by the public
and, secondarily, to extend the maturity of the debt obligations
associated with the existing notes.
To the extent any existing notes are accepted in the offers, the
6.350% notes, the 5.625% notes, the 2.750% notes due 2019, the
2.800% notes, the 3.500% notes and the 2.750% notes due 2020 will
be accepted for purchase and exchange in order of priority (the
“acceptance priority level”), with the 6.350% notes having an
acceptance priority level 1 (i.e., the highest level of priority
among the existing notes to be purchased and exchanged pursuant to
the offers), the 5.625% notes having an acceptance priority level
2, the 2.750% notes due 2019 having an acceptance priority level 3,
the 2.800% notes having an acceptance priority level 4, the 3.500%
notes having an acceptance priority level 5 and the 2.750% notes
due 2020 having an acceptance priority level 6 (i.e., the lowest
level of priority among the existing notes to be purchased and
exchanged pursuant to the offers).
Since, as of the early participation date, the minimum new note
condition was satisfied, for each $1,000 principal amount of
existing notes accepted for purchase and exchange, a tendering
eligible holder whose existing notes are validly tendered and
accepted for purchase and exchange will receive (1) $500 principal
amount of new notes plus (2) cash consideration equal to the early
participation consideration plus (3) accrued and unpaid interest.
Xerox does not expect to accept for purchase and exchange any
existing notes tendered after the early participation date.
The “early participation payment” per $1,000 principal amount of
existing notes is the early participation consideration plus $500
principal amount of new notes.
Hypothetical CashConsideration
Series Principal Amount ofNew Notes1
Early ParticipationConsideration2
6.350% Notes $500 $553.80 5.625% Notes $500 $585.12 2.750% Notes
due 2019 $500 $511.65 2.800% Notes $500 $504.32 3.500% Notes $500
$525.79 2.750% Notes due 2020 $500 $499.80
1 Per $1,000 principal amount of existing notes.2 Early
participation consideration includes an early participation premium
of $50.00 to be paid in cash with respect to the entire principal
amount of the existing notes to be accepted in the offers.
Eligible holders whose existing notes are accepted for purchase
and exchange will receive a cash payment representing accrued and
unpaid interest to, but not including, the initial settlement
date.
The existing notes will be purchased for cash and exchanged for
new notes based on the applicable acceptance priority level subject
to proration as described below and in the offering memorandum.
Existing notes not accepted due to the application of acceptance
priority levels or proration will be returned to their tendering
eligible holders promptly after the expiration or termination of
the offers.
Subject to the aggregate maximum principal cash purchase amount
and proration as described herein, all existing notes validly
tendered (and not validly withdrawn) at or before the early
participation date having a higher acceptance priority level will
be accepted before any existing notes validly tendered at or before
the early participation date having a lower acceptance priority
level are accepted.
Xerox refers to the existing notes that are validly tendered but
initially not accepted in the offers due to the application of
acceptance priority levels or proration as described herein as the
“excess existing notes”. Xerox will not accept any excess existing
notes in the offers.
This press release is not an offer to sell or a solicitation of
an offer to buy any securities in any jurisdiction or under any
circumstances in which the offer or sale is unlawful. Xerox has not
registered the new notes or the offering thereof under the
Securities Act of 1933, as amended, which Xerox refers to as the
“Securities Act,” or any state or foreign securities laws. The new
notes may not be offered or sold in the United States, unless they
are registered (including pursuant to the registration rights
agreement as defined in the offering memorandum) or pursuant to an
exemption from registration under the Securities Act.
The offers will only be made, and the new notes are only being
offered and will only be issued, to holders of existing notes
(i) in the United States, that are “qualified institutional
buyers”, as that term is defined in Rule 144A under the
Securities Act (each such holder, a “QIB”), in a private
transaction in reliance upon the exemption from the registration
requirements of the Securities Act and (ii) outside the United
States, that are persons other than “U.S. persons”, as that
term is defined in Rule 902 under the Securities Act, in
offshore transactions in compliance with Regulation S under
the Securities Act. Xerox refers to the holders of existing notes
that have certified to Xerox that they are eligible to participate
in the offers pursuant to at least one of the foregoing conditions
as “eligible holders”. Only eligible holders are authorized to
receive or review the offer documents or to participate in the
offers.
Global Bondholder Services Corporation has been retained to
serve as both the exchange agent and the information agent for the
offers. Eligible holders may download the offer documents from
Global Bondholder Services Corporation’s website at
http://gbsc-usa.com/eligibility/xerox or obtain from Global
Bondholder Services Corporation, free of charge, by calling
(toll-free) +1-866-794-2200 or (collect) +1-212-430-3774.
In making an investment decision, eligible holders must rely on
their own examination of Xerox and the terms of the offers,
including the merits and risks involved. They should not construe
anything in the offer documents as legal, business or tax advice.
They should consult their own advisors as needed to make their
investment decision and to determine whether they are legally
permitted to participate in the offers under applicable laws and
regulations. None of Xerox, the exchange agent, the information
agent, the trustee or the dealer managers or any affiliate of any
of them makes any recommendation as to whether eligible holders of
the existing notes should exchange their existing notes for new
notes pursuant to the offers. The offers are made only by the
offering memorandum and related letter of transmittal. This press
release is neither an offer to sell or purchase, nor a solicitation
of an offer to sell or purchase, any existing notes or new notes in
the offers. The offers are not being made to holders of existing
notes in any jurisdiction in which the making or acceptance thereof
would not be in compliance with the securities, blue sky or other
laws of such jurisdiction. In any jurisdiction in which the offers
are required to be made by a licensed broker or dealer, the offers
will be deemed to be made on behalf of Xerox by the dealer managers
or one or more registered brokers or dealers that are licensed
under the laws of such jurisdiction.
About Xerox
Xerox Corporation is an $11 billion technology leader that
innovates the way the world communicates, connects and works. Our
expertise is more important than ever as customers of all sizes
look to improve productivity, maximize profitability and increase
satisfaction. We do this for small and mid-size businesses,
large enterprises, governments, graphic communications providers,
and for our partners who serve them.
We understand what’s at the heart of work – and all of the forms
it can take. We embrace the increasingly complex world of paper and
digital. Office and mobile. Personal and social. Every day across
the globe – in more than 160 countries – our technology, software
and people successfully navigate those intersections. We automate,
personalize, package, analyze and secure information to keep our
customers moving at an accelerated pace. For more information
visit www.xerox.com.
Forward-Looking Statements
This release contains “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. The words
“anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”,
“should” and similar expressions, as they relate to us, 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: our ability to address our business challenges in order
to reverse revenue declines, reduce costs and increase productivity
so that we can invest in and grow our business; changes in economic
conditions, political conditions, trade protection measures,
licensing requirements and tax laws in the United States and in the
foreign countries in which we do business; changes in foreign
currency exchange rates; our ability to successfully develop new
products, technologies and service offerings and to protect our
intellectual property rights; 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; the
risk that partners, subcontractors and software vendors will not
perform in a timely, quality manner; actions of competitors and our
ability to promptly and effectively react to changing technologies
and customer expectations; our ability to obtain adequate pricing
for our products and services and to maintain and improve cost
efficiency of operations, including savings from restructuring
actions; the risk that individually identifiable information of
customers, clients and employees could be inadvertently disclosed
or disclosed as a result of a breach of our security systems;
reliance on third parties, including subcontractors, for
manufacturing of products and provision of services; our ability to
manage changes in the printing environment and markets and expand
equipment placements; interest rates, cost of borrowing and access
to credit markets; funding requirements associated with our
employee pension and retiree health benefit plans; the risk that
our operations and products may not comply with applicable
worldwide regulatory requirements, particularly environmental
regulations and directives and anti-corruption laws; the outcome of
litigation and regulatory proceedings to which we may be a party;
the risk that we do not realize all of the expected strategic and
financial benefits from the separation and spin-off of our Business
Process Outsourcing (BPO) business; and other factors that are set
forth in the “Risk Factors” section, the “Legal Proceedings”
section, the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section and other sections of
our Annual Report on Form 10-K, as well as in our Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K filed with the
Securities and Exchange Commission (“SEC”). Xerox assumes no
obligation to update any forward-looking statements as a result of
new information or future events or developments, except as
required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20170314005868/en/
Media:XeroxCarl Langsenkamp,
+1-585-423-5782carl.langsenkamp@xerox.comorInvestors:XeroxJennifer
Horsley, +1-203-849-2656jennifer.horsley@xerox.com
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