GE, Xerox Agree to 8-Year Financing Arrangement, $5 Billion
Press release from the issuing company
New Xerox U.S. Customer Leases to be Funded by GE Vendor Financial Services
STAMFORD, Conn.--Oct. 21, 2002--Xerox Corporation and General Electric today announced an eight-year agreement for GE Vendor Financial Services to become the primary equipment financing provider for Xerox customers in the United States through monthly advances against Xerox's new U.S. lease originations.
In addition to the $2.5 billion already funded by GE, which is secured by portions of Xerox's current U.S. lease receivables, the new agreement calls for GE to provide Xerox with funding in the U.S. of up to $5 billion outstanding during the eight-year term, subject to certain funding conditions.
"We are pleased that our relationship with Xerox continues to grow and strengthen," said Dan Henson, president and chief executive officer, GE Vendor Financial Services. "Our two organizations working together provide an effective combination with a great value proposition."
"This significant agreement represents a major step forward in Xerox's well defined strategy to further fortify its financial position," said Lawrence A. Zimmerman, Xerox senior vice president and chief financial officer. "We have put the right processes in place, supported by this long-term contractual arrangement with GE, to ensure financial flexibility as we effectively manage and strengthen our balance sheet."
The agreement takes effect immediately and calls for GE to lend against Xerox's U.S. lease receivables at over-collateralization rates that are currently about 10 percent. Xerox noted that the financing debt and the receivables will be consolidated on its balance sheet with the debt funded by the GE advances.
Earlier this year, the companies together launched Xerox Capital Services, LLC. XCS, jointly managed by GE and Xerox, is responsible for Xerox's customer administration operations in the U.S.
WhatTheyThink is the global printing industry's leading independent media organization with both print and digital offerings, including WhatTheyThink.com, PrintingNews.com and WhatTheyThink magazine versioned with a Printing News and Wide-Format & Signage edition. Our mission is to provide cogent news and analysis about trends, technologies, operations, and events in all the markets that comprise today’s printing and sign industries including commercial, in-plant, mailing, finishing, sign, display, textile, industrial, finishing, labels, packaging, marketing technology, software and workflow.