Moody's may upgrade Xerox

Moody's Investors Service said it placed the ratings of Xerox Corp. and its supported subsidiaries under review for possible upgrade, including Xerox's Ba1 corporate family rating, Ba1 (LGD3, 48%) senior unsecured rating, Ba2 (LGD6, 94%) subordinated rating, provisional Ba1 (LGD3, 48%) senior unsecured shelf registration, provisional Ba2 (LGD6, 94%) subordinated shelf registration, provisional Ba2 (LGD6, 97%) preferred shelf registration and Xerox Credit Corp.'s Ba1 (LGD3, 48%) senior unsecured rating.

The agency said the combination of consistent business execution, secured debt reduction and positive operating trends warrant the consideration of a rating upgrade. The review will focus on the prospects for continued steady business execution, overall modest revenue growth, consistent operating profitability in the 8% to 9% range, ongoing annual cash flow from operations in the $1.0 to $1.5 billion range, continued reduction of secured debt, the maintenance of solid liquidity and continued discipline with respect to share repurchase activity which should funded with free cash flow generation.

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