Xerox Corp. (XRX) Enters Agreement for $550M Credit Facility

Xerox Corp. (NASDAQ: XRX) has filed the following:

On November 17, 2023 (the “Closing Date”), Xerox Corporation (“Xerox”), as borrower, its parent company, Xerox Holdings Corporation (the “Company”), and certain subsidiaries of Xerox entered into a first lien term loan credit agreement (the “Credit Agreement”) with Jefferies Finance LLC, as administrative agent and collateral agent (the “Agent”) and the lenders party thereto (the “Lenders”), providing for a first lien senior secured term loan credit facility (the “TLB”) of $550.0 million to be extended to Xerox on the Closing Date (the “Loans”). The proceeds of the Loans will be used to repay in full all outstanding bridge loans extended to Xerox under its bridge credit agreement, dated as of September 28, 2023, entered into with, among others, Jefferies Finance LLC, as administrative agent, and the lenders party thereto.

Xerox’s obligations under the TLB are supported by, (i) on the Closing Date, guarantees from the Company and certain of Xerox’s U.S., Canadian and English subsidiaries, and security interests in substantially all of the assets of Xerox, the Company, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the Credit Agreement), and (ii) within a specified period following the Closing Date, guarantees from certain of Xerox’s German and Belgium subsidiaries, and security interests in the finance lease receivables of such Canadian and English subsidiaries (collectively, the “Loan Parties”).

Liens in favor of the Lenders under the TLB are subject to an intercreditor agreement entered into on the Closing Date with the administrative agent and collateral agent under Xerox’s existing ABL Credit Agreement, dated as of May 22, 2023.

At Xerox’s election, the Loans will bear interest at a per annum rate of either (1) a fluctuating rate equal to the highest of (A) a rate of 0.5% in excess of the “NYFRB” rate, (B) the “prime rate” and (C) a rate of 1.0% in excess of one-month Term SOFR, plus an applicable margin of 3.00%, or (2) Term SOFR for a one-, three- or six-month interest period or (as agreed to by the Agent and the Lenders) such other period, as selected by the Company (provided that such rate shall not be less than 0.50%), plus an applicable margin of 4.00%.

The Loans are repayable in full at maturity on November 17, 2029 and amortize at a rate of 5% per annum in years one and two, 7.5% per annum in year three and 10% per annum thereafter. If the Loans are voluntarily prepaid in connection with a repricing transaction within six months of the Closing Date, a prepayment premium of 1% will apply.

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

The TLB also contains customary excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, indebtedness, and other matters that are customary for similar term loan B facilities.

You May Also Be Interested In

• TransMedics Group (TMDX) Appoints Gerardo Hernandez as CFO, Issues 2024 Financial Outlook Update
• Joby Aviation (JOBY) CFO has accepted a position at another company
• MARA (MARA) Announces Pricing of Oversubscribed and Upsized Offering of Zero-Coupon Convertible Senior Notes due 2031