https://investors.xerox.com/node/30471/html
Seems like 800M wasn't quite enough to pay our employees, let's just get another 100M while we are at it.
10 replies (most recent on top)
nope, wrong.
These are 2nd lien notes. This extra $100 mil goes to paying the debt of and buying Lexmark.
This $500 mil is in escrow, and goes directly to Lexmark and Lexmark lenders when sale is done.
New CFO aint mathing too good....
So Note 1 is $400 MM @10% = $40 million. Note 2 is at $500 MM @13.5% = $67.5 MM.
That's $107.5 MM/ year, just in new interest?
That is brutal.
Q: Wait, if it's discounted 5% face value, and there is 13.5% interest on the note, the effective rate is something like 18.5% ?!
A: No, here's how it works.
Today: Xerox gets 95% = $95M
2026: Xerox Pays 13.5% Interest = -$13.5M
2027: Xerox Pays 13.5% Interest = -$13.5M
2028: Xerox Pays 13.5% Interest = -$13.5M
2029: Xerox Pays 13.5% Interest = -$13.5M
2030: Xerox Pays 13.5% Interest = -$13.5M
2031: Xerox Pays 13.5% Interest = -$13.5M
2031: Xerox Pays 100% of the debt = -$100M
In other words. Xerox will end up paying $181M over the 6 years. But in return they get $95M today.
This is what people refer to when they call these junk bonds for credit card loans.
Stop acting like you guys know what you're talking about
Wait, if it's discounted 5% face value, and there is 13.5% interest on the note, the effective rate is something like 18.5% ?!
It's on the 2nd Senior Secured note issue for 2031, They are taking this out at 13.5%
Classy!
At a price of 95% of principal amount :)