A $25 million piece of Xerox Corporation's bank debt was unloaded last week, and dealers tagged the buyer as a Japanese bank looking to play the bank debt against the company's bonds. The debt traded in the low 60s, essentially flat to where it has been. The copier-based company is headquartered in Stamford, Conn. A spokesman declined to comment on the bank debt levels and said that officials will give a report of the fourth quarter earnings today.
Some traders were skeptical of any recovery by the company in the foreseeable future. "It's like trying to make the Titanic do a quick turn," said a dealer. The company has previously announced various strategies for improving its business, including billions in asset sales, cost cutbacks, and new product offerings.
Late last year Xerox announced it had exhausted its entire credit line and that the company's fourth quarter loss would be worse than expected. Dealers reported the bid-offer spread was 50-60. Xerox's facility matures in 2002 and is priced at 15 basis points over LIBOR. First Chicago NBD, J.P. Morgan Chase and Citibank are the lead arrangers, according to Capital DATA Loanware. A spokeswoman at Chase declined to comment. Spokesmen at the other banks did not return calls by press time.