Xerox Corp. is finally in the market with a $1 billion refinancing credit after rumors that the company was staking out a deal circled the market since April (LMW, 4/21). The credit is part of the Stamford, Conn.-based company's $3.1 billion recapitalization strategy, announced last week. Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch and UBS Warburg lead the deal that includes a $700 million revolver and a $300 million term loan. A banker familiar with the credit said the deal was out to managing agents as of late last week and should be hitting retail investors in the near future. A Xerox filing said the new deal's pricing would range from LIBOR plus 13/4-3%, depending on leverage. The company's existing deal is priced in the LIBOR plus 4-41/2% range.
The company stated in a report that it plans to complete its recapitalization efforts by the end of this month. Also, as part of the strategy to pay off $3.1 billion on its existing facility, Xerox plans to issue 40 million shares of common stock valued at $434 million, $650 million of mandatory convertible preferred securities and approximately $1 billion of seven- and 10-year unsecured notes. Deutsche Bank, Goldman, Merrill and J.P. Morgan officials declined to comment, while Citi and UBS bankers did not return calls. Larry Zimmerman, senior v.p. and cfo of Xerox. A Xerox spokeswoman noted that the credit's completion was contingent upon the success of the other deals in the plan, but she declined to comment further.