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Industry News – Xerox

Xerox downgraded

  • the Fitch Ratings credit-rating agency announced that it revised its Rating Outlook for Xerox from Stable to Negative
    • firm said its rating actions followed Xerox’s second-quarter revenue decline of 35%
    • noted that lost post-sale revenue (such as toner cartridges, paper, etc.), which declined 34%, will likely not be recovered.
    • Xerox’s business “has also been challenged for the better part of the last decade, experiencing a 27% decline in revenue over 2014 through the LTM (last 12 months) period ending June 30, 2020.”
    • sees this worsening to 47% through the end of 2020
    • does not believe Xerox’s revenue will exceed $7 billion organically
    • Xerox relied on a secured borrowing to refinance its $313 million May maturity and until now had been absent from new issuance markets
    • Xerox thus far has signaled it will not use proceeds from its $2.2 billion sale of its interest in Fuji Xerox to repay borrowings
  • credit-ratings agency Moody’s Investors Service assigned a Ba1 rating to Xerox Holdings’ proposed senior unsecured notes
    • “The outlook is negative.”
    • as part of its rating actions, Moody’s withdrew its CFR, PDR, and SGL ratings for Xerox
    • All other ratings for Xerox Corporation were affirmed. Xerox Holding’s proposed notes will be used to refinance existing Xerox Corporation notes that mature in the second half of 2020.
    • “continued uncertainty about the company’s ability to stabilize and grow its revenue base over the next few years given the secular decline in copier and printing demand, as well as intense global competition.”

 

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