Xerox Corp.'s bank debt inched up to 79 last week from its last trade 72 six weeks earlier. Dealers reported a $25 million trade, but said overall there's been little activity in the name. While traders say the company's efforts to improve its finances by selling assets and cutting costs have helped, one cautioned that "they're not out of the woods." A company spokesman declined to comment on Xerox's trading, but did say the company has made progress in increasing liquidity. "We're at $2.8 billion at end of first quarter, which is up from $1 billion," he said. "We're on track and ahead of schedule with our turnaround plan." The company has sold $2 billion in assets.
Xerox's credit has struggled since late last year when it announced it had nearly exhausted its $7 billion revolver. Levels hit the low 60s, but there were no trades, as dealers reported buyers were aiming for the low 50s. Since then, the company has announced $2 billion in asset sales and $1 billion in cost cutting to improve its outlook, but traders say the credit is still a tough sell in the market.
The company has a $7 billion, five-year revolver. Pricing is 15 basis points over LIBOR. First Chicago Corp., J.P. Morgan Chase, and Citibank are the lead arrangers, according to Capital DATA Loanware.