Xerox Holdings Corporation Announces Pricing of Upsized Convertible Notes Offering

Core Viewpoint - Xerox Holdings Corporation announced the pricing of $350 million in 3.75% Convertible Senior Notes due 2030, increasing the offering size by $50 million from the initial announcement [1][2]. Group 1: Offering Details - The offering is a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933 [1][8]. - The company has granted initial purchasers a 13-day option to buy an additional $50 million in notes [1]. - The expected closing date for the sale of the notes is March 11, 2024, pending customary closing conditions [2]. Group 2: Use of Proceeds - Net proceeds from the offering will fund capped call transactions and refinance existing debt, including 3.800% Senior Notes due 2024 and part of 5.000% Senior Notes due 2025 [2]. - Remaining proceeds will be used to repay other outstanding indebtedness, pay related fees, and for general corporate purposes [2]. Group 3: Conversion and Redemption Features - The notes are convertible into cash and shares of common stock, with an initial conversion rate of 47.9904 shares per $1,000 principal amount, equating to a conversion price of approximately $20.84 per share, a 25% premium over the closing price of $16.67 on March 6, 2024 [3]. - The company can redeem the notes starting September 20, 2027, if the stock price meets certain conditions [4]. Group 4: Capped Call Transactions - The company entered into capped call transactions to reduce potential dilution from the conversion of the notes, with a cap price of approximately $28.34 per share, representing a 70% premium over the last reported sale price [5]. - If the initial purchasers exercise their option for additional notes, the company plans to enter into further capped call transactions [5]. Group 5: Market Impact and Hedging Activities - Counterparties involved in the capped call transactions may purchase shares of the company's common stock or enter into derivative transactions, potentially affecting the market price of the stock and the notes [6][7].