Xerox Just Borrowed ANOTHER $800 Million in Move to Purchase Lexmark Corporation.

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Xerox Piles on More Debt, Can Borrowing $800 Million Save a Company
on the Brink? or is this a Bold Move for the Purchase of Lexmark.
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Xerox Corporation is once again tapping into the debt markets, issuing a hefty $800 million in a two-part financing deal. On the surface, this may seem like a savvy business move designed to raise capital and shore up the company’s balance sheet. However, a deeper look into the company’s massive debt load raises critical questions about the sustainability of Xerox’s financial strategy and whether this latest debt issuance is merely kicking the can down the road.

NORWALK, Conn. – March 25, 2025 – Xerox Corporation today announced the launch of an offering comprising (i) $400,000,000 in aggregate principal amount of Senior Secured First Lien Notes due 2030 (the “First Lien Notes”), to be issued by Xerox Corporation and guaranteed by Xerox Holdings Corporation (“Xerox” and, collectively with Xerox Corporation, the “Company”) along with certain of Xerox’s domestic and international subsidiaries, and (ii) $400,000,000 in aggregate principal amount of Senior Secured Second Lien Notes due 2031 (the “Second Lien Notes” and together with the First Lien Notes, the “Notes”), to be issued by Xerox Issuer Corporation (the “Escrow Issuer”), a wholly-owned subsidiary of Xerox Corporation.

Xerox Corporation intends to utilize the net proceeds from the offering of the First Lien Notes, along with available cash, to fund the redemption of $90 million of Xerox’s 5.000% Senior Notes due 2025 (the “2025 Notes”), including applicable premiums and accrued interest, on or about the issue date of the First Lien Notes. The balance of the 2025 Notes will be redeemed on or before maturity. The remaining proceeds will be applied to general corporate purposes, including the repayment of $95 million in borrowings under Xerox Corporation’s first lien senior secured term loan credit facility, and to pay offering-related fees and expenses.

For the offering of the Second Lien Notes, Xerox Corporation plans to use the net proceeds for (i) funding a portion of the purchase price for the proposed acquisition (the “Lexmark Acquisition”) of all outstanding equity securities of Lexmark International II, LLC (“Lexmark”), as previously announced on December 22, 2024, and the repayment of substantially all of Lexmark’s outstanding debt, including accrued interest, fees, and premiums, and (ii) covering offering-related fees and expenses tied to the acquisition and associated transactions.

Until the completion of the Lexmark Acquisition, the gross proceeds from the Second Lien Notes will be deposited into an escrow account for the benefit of the Second Lien Noteholders. The funds will remain in escrow until certain release conditions are met, including the successful completion of the Lexmark Acquisition. Upon the release of the proceeds, Xerox Corporation will assume the obligations of the Escrow Issuer, and the Second Lien Notes will be guaranteed by certain domestic and foreign subsidiaries of Xerox.

The Notes and related guarantees are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. The Notes and guarantees have not been registered for sale under the Securities Act or any state securities laws, and they may not be offered or sold in the U.S. unless registered or exempt from registration under the Securities Act and applicable state laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes, guarantees, or any other security, nor does it constitute an offer, solicitation, or sale of any securities in any jurisdiction where such offering, solicitation, or sale would be unlawful.

Tonernews.com: A Desperate Attempt to Stay Afloat
Xerox’s $800 million two-part debt issuance could be viewed as a necessary move for a company struggling to maintain operations in an increasingly competitive and declining industry. However, this latest debt issuance should not be seen as a sign of strength, but rather a reflection of the company’s ongoing reliance on borrowing to survive. With a massive debt load already weighing on the company’s future, Xerox is walking a fine line between financial maneuvering and financial peril.

For investors, this deal may seem tempting in the short term, but it’s essential to consider the long-term risks involved. As Xerox continues to stack more debt onto an already precarious balance sheet, it’s becoming increasingly difficult to see how the company can avoid a disastrous financial outcome. If Xerox cannot successfully pivot to a profitable future, it may find itself on the wrong side of its debt obligations sooner rather than later.

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March 25, 2025 at 3:39 PM