XEROX NEEDS CASH , PRINTS $1BILLION WORTH OF STOCK OFFERINGS

[Anonymous]

XEROX NEEDS CASH , PRINTS $1BILLION WORTH OF STOCK OFFERINGS 

Xerox Corp Sells $1 Bln, 2-Part Senior Debt Sale
NEW YORK -Xerox Corp.sold Friday a $1 billion, two-part offering of senior unsecured debt.The issue includes three-year, floating rate notes due on May 16, 2014, and 10-year, fixed-rate notes with a final maturity of May 15, 2021.The $300 million floating-rate tranche was sold with a risk premium of 82 basis points over the three-month London Interbank Offered rate while the $700 million 10-year piece was sold with a 4.50% coupon at a price of 99.246 to yield 4.595% and offered a risk premium of 145 basis points over Treasurys.

Both parts were launched earlier Friday at tighter levels than preliminary pricing guidance had suggested, indicating heavy demand for the issue."Both pieces will certainly be sold at lower spreads," according to one bond buyer, who added that not only is the credit a popular one with investors, but it’s the only high-grade issue on Friday’s calendar.Xerox 5.625% bond due 2019 recently traded at 114 basis points over Treasurys, according to MarketAxess.The deal was sold via active bookrunners Citigroup (C), Deutsche Bank Securities (DB) and UBS (UBS).

Company spokesman Carl Langsenkamp declined comment.
Proceeds will be used for general corporate purposes, which could include the repayment of the company’s $650 million XRX Capital Trust 8.00% issue due in 2027, according to the deal prospectus.

The offering includes a change-of-control provision, which is designed to safeguard investors against event risk if the issuer is taken over in a leveraged buyout or undergoes some other fundamental corporate change. The covenant is triggered at a premium price of $101.The deal has been rated Baa2 by Moody’s Investors Service and BBB- by Standard & Poor’s.

[Author]

May 18, 2011 at 10:42 AM