Xerox Holdings and Xerox Corp. have agreed with holders of about $174 million of Holdings’ 5.5% notes due 2028 to exchange that debt for new, higher-coupon secured debt issued by Xerox Corp. and Holdings common stock. The participating notes represent about 31.1% of the 2028 notes outstanding.
The deal also adds restrictions on certain entities’ ability to take on more debt or issue equity. Those changes are set to take effect if the exchange closes.
Key details
- For each $1,000 of 2028 notes exchanged, holders are to receive $690 of Xerox Corp. 10.25% secured first-lien notes due 2030, plus Holdings common stock. The terms list 3,872,062 shares as the stock component; in limited circumstances, holders may receive an additional $60 of the new notes instead.
- The new notes will have terms, priority and collateral substantially similar to Xerox Corp.’s existing 10.25% first-lien notes due 2030. The exchange therefore replaces part of Holdings’ 2028 debt with debt issued by Xerox Corp., at a higher stated interest rate and with first-lien security.
- The companies have agreed to amend their term-loan agreement and the indenture governing Xerox Corp.’s existing first-lien notes. The amendments add restrictions on certain entities’ ability to incur additional debt or issue equity. The term-loan changes were signed alongside the exchange agreement but become effective only when the exchange settles.
- Participating holders have committed to tender their notes by the early exchange deadline of November 12, 2026, subject to the agreement’s conditions. Settlement is expected around November 13. The agreement can be terminated in specified circumstances, including if early settlement has not occurred by November 20.
- Holders who complete the exchange, and beneficial owners who accept the new notes, agree not to bring or support claims against the companies and related parties arising from the joint venture announced in February 2026 and related transactions, subject to the agreement’s conditions.
- Holdings has agreed to seek to register the shares issued in the exchange for resale on or before settlement.
Plain-English implications
The exchange reduces the principal amount of 2028 notes being refinanced: each $1,000 tendered is replaced with $690 of new debt, alongside stock consideration. In return, the new debt carries a 10.25% coupon and first-lien security. Issuing shares adds to Holdings’ share count, while the new covenants constrain certain entities’ ability to add debt or issue equity once the amendments take effect.