By Abigail W. Adams
Portland, Me., March 7 – Xerox Holdings Corp. priced an upsized $350 million of six-year convertible notes (B1/BB) after the market close on Wednesday at par with a coupon of 3.75% and an initial conversion premium of 25%, according to a company news release.
Pricing came tighter than the rich end of initial talk for a coupon of 4% to 4.5% and an initial conversion premium of 17.5% to 22.5%, according to a market source.
Citigroup Global Markets Inc. was the bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $50 million.
The initial size of the offering was $300 million with a greenshoe of $45 million.
ICR Capital LLC is financial adviser to the company.
The notes are non-callable until Sept. 20, 2027 and then subject to a 130% hurdle.
They will be settled in cash up to the principal amount with any remaining amounts to be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company enter into capped call transactions with a cap price of $28.34, which represents a 70% premium over the last reported sales price of stock.
Proceeds will be used to fund the cost of the call spread and, together with proceeds from the concurrent $500 million sale of 8 7/8% senior notes due 2029, fund a tender offer for any and all of the company’s 3.8% senior notes due 2024, which have $300 million in principal outstanding, and a portion of the 5% senior notes due 2025, which have $750 million in principal outstanding.
Remaining proceeds will be used for general corporate purposes.
Xerox is a Norwalk, Conn.-based supplier of print and digital document products and services.
| Issuer: | Xerox Holdings Corp.
|
| Amount: | $350 million
|
| Greenshoe: | $50 million
|
| Issue: | Convertible senior notes
|
| Maturity: | March 15, 2030
|
| Bookrunner: | Citigroup Global Markets Inc.
|
| Financial adviser: | ICR Capital LLC
|
| Coupon: | 3.75%
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion premium: | 25%
|
| Conversion price: | $20.84
|
| Conversion rate: | 47.9904
|
| Call options: | Non-callable until Sept. 20, 2027 and then subject to a 130% hurdle
|
| Pricing date: | March 6
|
| Settlement date: | March 11
|
| Rating: | Moody’s: B1
|
| S&P: BB
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 4% to 4.5% and initial conversion premium of 17.5% to 22.5%
|
| Stock symbol: | Nasdaq: XRX
|
| Stock price: | $16.67
|
| Market capitalization: | $2.07 billion
|
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