NORWALK, Conn. - Xerox (NASDAQ:XRX) Holdings Corporation (NASDAQ:XRX) has priced $350 million in aggregate principal amount of 3.75% Convertible Senior Notes due 2030, an increase from the initially announced amount, with an additional purchase option for initial buyers of up to $50 million. The offering, aimed at qualified institutional buyers, is expected to close on March 11, 2024, subject to customary closing conditions.
The proceeds from the sale of these notes will primarily fund capped call transactions to reduce potential dilution upon conversion of the notes. Remaining funds, along with those from a concurrent senior notes offering, will refinance existing debt, repay other outstanding indebtedness, cover related fees, and support general corporate purposes.
These senior unsecured obligations will pay interest semi-annually and are convertible into cash, Xerox common stock, or a combination thereof, at the company's discretion. The initial conversion rate is set at nearly 48 shares of common stock per $1,000 principal amount of notes, representing a 25% premium over Xerox's common stock closing price on NASDAQ on March 6, 2024.
Xerox may redeem the notes starting September 20, 2027, under certain conditions related to the company's stock price. The notes will mature on March 15, 2030.
In conjunction with the note pricing, Xerox entered into capped call transactions with certain financial institutions. These are expected to mitigate dilution and/or offset cash payments required upon conversion of the notes, subject to a cap. The initial cap price is set at a 70% premium over Xerox's March 6, 2024, closing stock price.
The financial institutions may also engage in transactions that could affect Xerox's common stock market price, coinciding with the note pricing and potentially thereafter.
The notes, guarantees, and shares of common stock issuable upon conversion have not been registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an exemption from such registration requirements.
This news is based on a press release statement and should not be considered an offer to sell or a solicitation to buy Xerox securities.
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