Xerox Holdings Corporation Announces Full Exercise of Over-Allotment Option for its 3.75% Convertible Senior Notes due 2029, and Completion of Series of Financing Transactions

Xerox Holdings Corporation (NASDAQ: XRX) (the “Company”) today announced the full exercise of the over-allotment option for its offering of 3.75% Convertible Senior Notes due 2030 (the “Convertible Notes”), raising an additional $50,000,000 and bringing the total gross proceeds from the Convertible Notes offering to $400,000,000. This announcement follows the Company’s announcements last week of the closing of its offering of $500,000,000 aggregate principal amount of 8.875% Senior Notes due 2029 (the “Senior Notes”), as well as the early settlement of its previously announced cash tender offers, resulting in the repurchase of $82,842,000 aggregate principal amount of its 3.800% senior notes due 2024 (“2024 Notes”) and $362,000,000 aggregate principal amount of its 5.000% senior notes due 2025 (“2025 Notes”).

“The recently completed note offerings and repurchase of our 2024 and 2025 Notes greatly enhance the Company’s financial flexibility as we execute Xerox’s Reinvention and invest in our growing Digital and IT businesses,” said Xavier Heiss, Chief Financial Officer of Xerox Holdings Corporation. “We intend to use the remaining net proceeds to repay the balance of the 2024 Notes at maturity and a portion of our other outstanding indebtedness, resulting in a cost-effective extension of our debt maturity profile. We are pleased with the outcome of the note offerings, with strong demand for both the Convertible Notes and Senior Notes allowing us to upsize the final issuance size of each offering.”

The aggregate principal amount of the Convertible Notes is convertible into cash only and the remainder, if any, can be settled in cash, stock or a combination thereof, at the Company’s election. To further reduce potential dilution to the holders of the Company’s common stock upon conversion of the Convertible Notes, the Company entered into privately negotiated capped call transactions which effectively raise the strike price on the Convertible Notes from $20.84 to $28.34 (~70% effective conversion premium relative to the last reported sale price as of the pricing date of March 6, 2024).

The offerings of the Convertible Notes and Senior Notes were made in private placements to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”), and, in the case of the Senior Notes offering, to non-U.S. persons outside the United States pursuant to Regulation S under the Act.