v3.26.1
Debt
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
Short-term borrowings were as follows:
December 31,
 20252024
Short-term debt and current portion of long-term debt
Xerox Holdings Corporation$121 $388 
Xerox Corporation109 130 
Xerox - Other Subsidiaries(1)
1 67 
Total$231 $585 
_____________
(1)Represents subsidiaries of Xerox Corporation.
We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest put date available to the debt holders. We defer costs associated with debt issuance over the applicable term, or to the first put date in the case of convertible debt or debt with a put feature. These costs are amortized as interest expense in our Consolidated Statements of (Loss) Income.
Long-term debt was as follows:
December 31,
 Stated Rate
Weighted Average Interest Rates at December 31, 2025(1) 
20252024
Xerox Holdings Corporation
Senior Notes due 20255.00 %— %$— $388 
Senior Notes due 202613.00 %18.61 %125 — 
Senior Notes due 20285.50 %5.40 %750 750 
Senior Notes due 20298.88 %8.88 %500 500 
Senior Notes due 203013.00 %13.00 %250 — 
Convertible Senior Notes due 20303.75 %3.75 %400 400 
Subtotal - Xerox Holdings Corporation$2,025 $2,038 
Xerox Corporation
Term Loan B due 2029(2)(3)
7.71 %7.71 %$706 $523 
Secured Promissory Note due 2025(2)
— %— %— 110 
Secured Promissory Note due 2026(2)
— %5.53 %110 110 
Senior Secured Notes due 2030(2)
10.25 %10.50 %400 — 
Senior Secured Notes due 2031(2)
13.50 %14.16 %500 — 
Senior Notes due 20354.80 %4.84 %250 250 
Senior Notes due 20396.75 %6.78 %350 350 
Subtotal - Xerox Corporation$2,316 $1,343 
Xerox - Other Subsidiaries(2)
France— 70 
Lexmark3 — 
Subtotal Xerox - Other Subsidiaries$3 $70 
Principal debt balance$4,344 $3,451 
Xerox Holdings Corporation - Debt issuance costs(20)(19)
Xerox Corporation - Debt issuance costs(39)(11)
Xerox - Other subsidiaries - Debt issuance costs— — 
Subtotal - Debt issuance costs$(59)$(30)
Unamortized (discount) premium(38)(22)
Less: current maturities (231)(585)
Total Long-term Debt$4,016 $2,814 
_____________
(1)Represents the weighted average effective interest rate, which includes the effect of discounts, premiums and imputed interest on issued debt.
(2)Represent secured borrowings of Xerox Corporation and its Other subsidiaries. Refer to the Secured Borrowings and Collateral section below for additional information regarding the secured borrowings of Other subsidiaries, which are secured by finance receivables.
(3)The stated rate and the weighted average interest rate for the TLB is SOFR plus a margin of 4.00%, which is the option selected by Xerox per the terms of the agreement. Refer to the Term Loan B Credit Facility discussion below for additional information on the TLB.
Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:
2026(1)
2027202820292030ThereafterTotal 
Xerox Holdings Corporation$125 $25 $775 $531 $569 $— $2,025 
Xerox Corporation110 51 90 565 400 1,100 2,316 
Xerox - Other Subsidiaries(2)

1 1 1 — — — 3 
Total$236 $77 $866 $1,096 $969 $1,100 $4,344 
_____________
(1)Current portion of long-term debt maturities for 2026 are $110, $125, $1 and $0 for the first, second, third and fourth quarters, respectively.
(2)Represents subsidiaries of Xerox Corporation.
We have entered into transactions, and continue to seek opportunities to reduce our borrowings in a cost and cash efficient manner, including strategies to retire debt that has recently traded at significant discounts. Refer to Note 26 - Subsequent Events, for additional information.
Senior Secured and Unsecured Notes
Xerox Corporation
On April 11, 2025, Xerox Corporation and Xerox Issuer Corporation, a wholly-owned subsidiary of Xerox Corporation (Escrow Issuer), completed a private offering of (i) $400 aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030 at 99% of par (the First Lien Notes) issued by Xerox Corporation, and (ii) $400 aggregate principal amount of 13.500% Senior Secured Second Lien Notes due 2031 at 98% of par (the Second Lien Notes, issued and together with the First Lien Notes, the Notes) issued by the Escrow Issuer. The Company received net proceeds (after discount, fees and expenses) on the issuance of the First Lien Notes of $366, and net proceeds of $392 (after discount) on the issuance of the Second Lien Notes. The net proceeds of the Second Lien Notes were deposited into an escrow account upon the issuance of the Second Lien Notes and were released upon the consummation of the Lexmark Acquisition.
On May 9, 2025, the Escrow Issuer issued an additional $100 of the Second Lien Notes at 95% of par. Net proceeds (after discounts, fees and expenses) were approximately $93. The net proceeds were deposited into the escrow account, as well as $1 of accrued and unpaid interest, and a deposit of $2 by Xerox Corporation. On July 1, 2025, approximately $494 was released from escrow (including accrued interest) to fund a portion of the Lexmark Acquisition. An additional $15 of commitment and underwriting fees were paid upon the release of the proceeds from escrow. Upon consummation of the Lexmark Acquisition, the Escrow issuer was merged into Xerox Corporation and Xerox Corporation assumed the Second Lien Notes.
Net proceeds from the offering of the First Lien Notes, together with cash on hand, were used to redeem Xerox Holdings Corporation’s 5.000% Senior Notes due 2025 (2025 Notes) and to pay fees and expenses, including redemption premiums and accrued interest, in connection with the First Lien Notes offering, the Lexmark Acquisition and the related transactions.
Net proceeds from the offering of the Second Lien Notes were used to (i) fund a portion of the purchase price for the Lexmark Acquisition and the repayment of a portion of Lexmark’s outstanding debt (together with accrued interest and any applicable expenses, fees or premiums) and (ii) pay fees and expenses in connection with the Second Lien Notes offering, the Lexmark Acquisition and the related transactions.
The First Lien Notes are governed by an indenture, dated as of April 11, 2025 (the First Lien Indenture), among Xerox Corporation, Xerox Holdings Corporation (Xerox Holdings Corporation and, together with Xerox Corporation, the Company), certain of Xerox Corporation's domestic and foreign subsidiaries and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the First Lien Notes Agent). The Second Lien Notes are governed by an indenture, dated as of April 11, 2025 (the Second Lien Indenture and, together with the First Lien Indenture, the Indentures), between the Xerox Holdings Corporation, Xerox Corporation (as successor to the Escrow Issuer), certain of Xerox Corporation’s domestic and foreign subsidiaries and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the Second Lien Notes Agent).
The First Lien Notes mature on October 15, 2030 and bear interest at a rate of 10.250% per annum. The Second Lien Notes bear interest at a rate of 13.500% per annum. The First Lien Notes are unconditionally guaranteed on a senior secured basis by Xerox Holdings Corporation and certain of Xerox Corporation’s domestic and foreign subsidiaries (including, following the completion of the Lexmark Acquisition, Lexmark and certain of its domestic and foreign subsidiaries). Subject to certain exceptions and permitted liens, the First Lien Notes are secured by security interests in substantially all of the assets of the guarantors of the First Lien Notes (the Collateral) on a first-priority basis by the Collateral that is Fixed Asset Collateral (as defined in the First Lien Indenture) and on a second-priority basis by the Collateral that is Current Asset Collateral (as defined in the First Lien Indenture).
Subject to certain exceptions and permitted liens, the Second Lien Notes are secured by security interests in the same Collateral as the First Lien Notes, but on a second-priority basis by the Collateral that is Fixed Asset Collateral (as defined in the Second Lien Indenture) and on a third-priority basis by the Collateral that is Current Asset Collateral (as defined in the Second Lien Indenture).
The Indentures contain customary affirmative and negative covenants governing dividends, investments, debt, liens, and other matters of default.
Xerox Holdings Corporation
On July 1, 2025, Xerox Holdings Corporation completed an offering of (i) $125 aggregate principal amount of 13.00% Senior Unsecured Notes due June 2026 (the 2026 Notes), and ii) $250 aggregate principal amount of 13.00% Senior Notes due July 2030 (the 2030 Notes). Xerox Holdings Corporation received net proceeds (after discount, fees and expenses) on issuance of the 2026 Notes of approximately $116, and net proceeds on the
issuance of the 2030 Notes of approximately $245. In connection with the issuance of the 2030 Notes, Xerox Holdings Corporation issued a pre-funded warrant with a fair value of approximately $11 (as of the date of the issuance). Refer to Note 22 - Shareholders' Equity for additional information regarding the issuance of the pre-funded warrant.
The 2026 Notes mature on June 30, 2026 and provide the option for Xerox Holdings Corporation (at its sole discretion) to extend the maturity of approximately $62.5 of the 2026 Notes for an additional six-month period (for a 2% fee on the amount of 2026 Notes outstanding after the payment on the scheduled maturity date). The 2026 Notes bear interest at a rate of 13.00% per annum. During the extension period, the 2026 Notes will continue to bear interest at 13.00% per annum.
The 2026 Notes are governed by an indenture, dated as of July 1, 2025 (the 2026 Notes Indenture), among Xerox, Xerox Holdings Corporation, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2026 Notes are unconditionally guaranteed on an unsecured basis by Xerox Corporation and certain of Xerox’s domestic and foreign subsidiaries.
Xerox used the net proceeds of the 2030 Notes to fund a portion of the purchase price for the Lexmark Acquisition and to repay a portion of Lexmark’s outstanding debt (together with accrued interest and any applicable expenses, fees or premiums) and to pay fees and expenses in connection with the Lexmark Acquisition. The net proceeds of the 2026 Notes are being used for general corporate purposes including, without limitation, funding the realization of synergies associated with the Lexmark Acquisition.
The 2030 Notes mature on July 31, 2030 and initially bear interest at a rate equal to 13.00% per annum. The initial interest rate on the 2030 Notes will increase (Interest Rate Step-Up) to the rates (on a per annum basis) set forth below for the period from and including the dates indicated below (each a Step-Up Date) to but excluding the next succeeding Step-up Date, or the stated maturity of the 2030 Notes, as applicable.

Step-Up DateInterest Rate Step-Up
July 1, 202613.500 %
July 1, 202714.000 %
October 1, 202714.125 %
January 1, 202814.250 %
April 1, 202814.500 %
July 1, 202814.750 %
October 1, 202815.000 %
January 1, 202915.250 %
April 1, 202915.500 %
July 1, 202915.750 %
October 1, 202916.000 %
January 1, 203016.250 %
April 1, 203016.500 %
July 1, 203016.750 %
The 2030 Notes are governed by an Indenture, dated as of July 1, 2025 (the 2030 Notes Indenture), among Xerox Corporation, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes are unconditionally guaranteed on an unsecured basis by Xerox Corporation and certain of Xerox Corporation’s domestic and foreign subsidiaries (including, following the completion of the Lexmark Acquisition, Lexmark and certain of its domestic and foreign subsidiaries).
Each of the 2026 Notes Indenture and the 2030 Notes Indenture contains customary affirmative and negative covenants governing dividends, investments, debt, liens, and other matters and events of default. Net proceeds of the 2030 Notes offering were used to (i) fund a portion of the purchase price for the Lexmark Acquisition and the repayment of a portion of Lexmark’s outstanding debt (together with accrued interest and any applicable expenses, fees or premiums) and (ii) pay fees and expenses in connection with the Second Lien Notes offering, the Lexmark Acquisition and the related transactions. Net proceeds of the 2026 Notes offering are being used for general corporate purposes including, without limitation, funding the realization of synergies associated with the Lexmark Acquisition. Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Term Loan B Credit Facility
In November 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation, and certain of Xerox Corporation’s subsidiaries, as guarantors, entered into a first lien term loan credit agreement with Jefferies Finance LLC, as administrative agent and collateral agent (the TLB Agent), and a syndicate of lenders providing for a first lien senior secured term loan credit facility (the TLB Facility) to Xerox Corporation of $550, which was fully extended as term loans to Xerox Corporation at closing. The term loans under this facility included an aggregate original issue discount (OID) of $17 and debt issuance costs of $9 resulting in net proceeds of approximately $524. The OID and debt issuance costs were accordingly deferred and are amortized over the term of the Loans.
On July 1, 2025, Xerox Corporation made an incremental term loan borrowing of approximately $327 (Incremental Term Loans) under the TLB Facility. Substantially all of the net proceeds of the Incremental Term Loans were used to repay (through a cashless settlement) a portion of Lexmark’s assumed debt of $323. Debt issuance costs of approximately $1 were paid and deferred in connection with the issuance of the Incremental Term Loans, and will be amortized over the remaining term. Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition and the TLB Facility.
As a result of sales of finance receivables during the third quarter 2025, approximately $41 of the TLB Facility was repaid in October 2025. Refer to Note 8 - Finance Receivables, Net for additional information regarding our sales of finance receivables.
Xerox Corporation’s obligations under the TLB Facility are supported by, guarantees from the Company and certain of Xerox Corporation’s U.S., Canadian, German, Belgium, and English subsidiaries, and security interests in substantially all of the assets of the Company, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB Facility), and security interests in the finance lease receivables of such German and Belgium subsidiaries. Liens in favor of the lenders or holders, as applicable, under the TLB, the ABL, the First Lien Notes, the Second Lien Notes and the ITsavvy Notes are subject to intercreditor agreements with the TLB Agent, ABL Agent, the First Lien Notes Agent, the Second Lien Notes Agent and ITsavvy Holdings, LLC, as the representative for the holders of the ITsavvy Notes.
At Xerox Corporation’s election, the term loans will bear interest at a per annum rate of either:
(1) a fluctuating rate equal to the highest of (A) a rate of 0.5% in excess of the “NYFRB” rate, (B) the “prime rate” and (C) a rate of 1.0% in excess of one-month Term SOFR, plus an applicable margin of 3.00%, or
(2) Term SOFR for a one-, three- or six-month interest period or (as agreed to by the Agent and the Lenders) such other period, as selected by the Company (provided that such rate shall not be less than 0.50%), plus an applicable margin of 4.00%, for Term SOFR term loans, or 3.00% for ABR term loans. There are $706 of term loans outstanding at December 31, 2025. Currently, $406 of the term loans bears interest at an average rate of 7.73%, $175 bears interest at an average rate of 7.67% through Mar 31, 2026, and the remaining $125 of the term loans bears interest at an average rate of 7.72% through January 31, 2026, at which time the interest rate will reset based on Xerox Corporation’s elections.
The remaining term loans are repayable in full at maturity in November 2029 and amortize at a quarterly rate of 7.50% per annum in 2026 and 10% per annum thereafter.
If an event of default occurs under the TLB Facility, the entire principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods. The TLB Facility also contains customary excess cash flow and asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, debt, liens, and other matters that are customary for similar term loan B facilities.
In October 2025, Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the TLB Facility. Refer to the Debt section of Note 6 – Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Revolving Credit Facility
In May 2023, Xerox Corporation, as borrower, Xerox Holdings Corporation and certain subsidiaries of Xerox Corporation, as guarantors, entered into a five-year asset-based revolving credit agreement (the ABL Facility) with Citibank, N.A., as administrative agent and collateral agent (the ABL Agent) and several lenders including Citibank N.A. The aggregate outstanding principal amount of the ABL Facility is payable in full at maturity on the earlier of May 22, 2028, and date that is 91 days prior to the final scheduled maturity date of any Material Springer Debt (as defined in the ABL Facility), and there are no scheduled principal payments prior to maturity. We deferred
approximately $7 of debt issuance costs in connection with the ABL Facility, which are being amortized over the five-year term.
In February 2024, the Company, Xerox Holdings Corporation and the Administrative Agent entered into an amendment in connection with the delivery of additional guarantees and collateral under the ABL Facility as a result of the Company’s execution of the TLB Facility, which constituted Material Springer Debt (as defined in the ABL Facility), and the execution of certain guarantees by subsidiaries of the Company in connection with the TLB.
In June 2024, Xerox Corporation and Xerox Holdings Corporation, entered into Amendment No. 2 to Credit Agreement (the Amendment) with the ABL agent, and the lenders party thereto. The Amendment amended the ABL Facility, to (i) increase the commitments of the lenders under the ABL Credit Agreement from $300 to $425 and (ii) amend the excess availability used to trigger the fixed charge coverage ratio springing covenant from an amount equal to the greater of (A) $22.5 and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base), to an amount equal to the greater of (A) $31.875 and (B) 10% of the Line Cap.
Under the amended ABL Facility, Xerox Corporation may borrow up to the lesser of (x) $425 and (y) a borrowing base calculated based on accounts receivable and inventories of the loan parties thereunder as set forth in the ABL Facility. The ABL Facility includes an uncommitted accordion feature that allows Xerox Corporation to increase the facility by a total of up to $250, subject to obtaining additional commitments from existing lenders or new lending institutions. The ABL Facility also includes a $100 letter of credit subfacility. Xerox Corporation's borrowings under the ABL Facility are supported by guarantees from Xerox Holdings Corporation and certain of Xerox Corporation's U.S., Canadian, German, Belgian and English subsidiaries, and by security interests in substantially all of the assets of Xerox Corporation, Xerox Holdings Corporation, and such U.S., Canadian and English subsidiaries (subject to certain exceptions and limitations set forth in the TLB Facility), and all finance lease receivables of such German and Belgian subsidiaries.
At Xerox Corporation’s election, the loans under the amended ABL Facility will bear interest at either:
(1)a fluctuating rate per annum equal to the highest of (A) Citibank’s base rate, (B) a rate of 0.5% in excess of the “NYFRB” rate, and (C) a rate of 1.0% in excess of one-month Term SOFR, provided that such fluctuating rate shall not be less than 0.0%, in each case plus an applicable margin (the loans bearing interest at such fluctuating rate, ABR Loans); or
(2)the one-, three-, or six-month period or (as agreed to by the Agent and the Lenders) such other period, as selected by the Xerox Corporation, per annum Term SOFR (plus a 0.10% credit spread adjustment), provided that such rate shall not be less than 0.0%, plus an applicable margin (the loans bearing interest at such rate Term SOFR Loans).
The applicable margin for ABR loans ranges from 0.5% to 1.0% depending on the Company’s average daily excess availability. The applicable margin for Term SOFR loans from 1.5% to 2.0% depending on the Company’s average daily excess availability.
The amended ABL Facility requires the Company to comply with a fixed charge coverage ratio of 1x, as defined in the ABL Facility, measured as of the last day of each fiscal quarter during which excess availability is less than an amount equal to the greater of (A) $31.875 and (B) 10% of the Line Cap (the lesser of the aggregate amount of revolving commitments and the then-applicable borrowing base). Based on the excess availability at December 31, 2025, the fixed charge coverage ratio measurement was not applicable. The amended ABL Facility also contains negative covenants governing dividends, investments, debt, liens, and other matters customary for similar facilities.
As of March 16, 2026 and based on our January availability calculation, we have availability of $382 before letters of credit issued under the ABL Facility of approximately $93. There are no current borrowings outstanding. Accordingly, our net availability is approximately $289. As discussed above, certain debt covenants limit our total amount of secured debt outstanding. As of the date of our filing, our capacity under the ABL was not limited by any debt covenants. Our capacity to borrow under the ABL Facility may be adversely impacted by the terms of the ABL Facility and certain other agreements that govern our debt.
If an event of default occurs under the amended ABL Facility, the entire principal amount outstanding, together with all accrued unpaid interest and other amounts owed in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods.
In October 2025, Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the ABL. Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Secured Promissory Notes
In connection with Xerox Corporation's acquisition of ITsavvy Acquisition Company, Inc. (ITsavvy), Xerox Corporation issued two, non-interest bearing, secured promissory notes (the 2025 ITsavvy Note and the 2026 ITsavvy Note, or the ITsavvy Notes). Each of the ITsavvy Notes had a principal amount of $110. The 2025 ITsavvy Note had a maturity date of October 8, 2025, and the 2026 ITsavvy Note had a maturity date of January 30, 2026. The 2025 ITsavvy Note has been paid in full in cash as of its maturity date. Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the ITsavvy and the ITsavvy Notes.
In October 2025, the U.S. Lexmark and certain of its domestic and foreign subsidiaries became guarantors under the TLB Facility. Refer to the Debt section of Note 6 - Acquisitions and Divestitures, for additional information regarding the Lexmark Acquisition.
Capped Calls
In connection with the issuance of the 2030 3.75% Convertible Senior Notes in 2024 (the 2030 Convertible Notes), the Company entered into privately negotiated capped call transactions (the Capped Calls) with certain of the initial purchasers of the 2030 Convertible Notes or their respective affiliates (the option counterparties) at a cost of approximately $23. The Capped Calls cover, subject to anti-dilution adjustments, the number of shares of the Company's common stock initially underlying the 2030 Convertible Notes. By entering into the Capped Calls, we expect to reduce the potential dilution to the Company's common stock (or, in the event a conversion of the 2030 Convertible Notes is settled in cash, to reduce our cash payment obligation) in the event that at the time of conversion of the 2030 Convertible Notes the trading price of our common stock price exceeds the conversion price of the 2030 Convertible Notes.
The initial cap price of the Capped Calls was approximately $28.34 per share, which represents a premium of 70% over the last reported sale price of our common stock of $16.67 on the NASDAQ Stock Exchange on March 6, 2024, and is subject to certain adjustments under the terms of the Capped Calls.
Under the terms of the Capped Call, a dividend payment below the Company’s $1.00 annual dividend at the time of the purchase of the Capped Call could result in an adjustment to the cap price. This adjustment is intended to preserve the original economics of the Capped Call and is permissible under ASC 815-40, and therefore, the Capped Call continues to meet the conditions for equity classification. The Capped Call cap price was reduced to $27.51 per share as a result of the reduction of our annual dividend from $1.00 to $.50 in the first quarter of 2025. In the second quarter of 2025, the annual dividend was reduced to $.10 per share. The current Capped Call cap price was reduced to $20.84 per share, which is the same as the conversion price of the 2030 Convertible Notes.
Xerox Holdings Corporation/Xerox Corporation Intercompany Loan
In March 2024, Xerox Holdings Corporation and Xerox Corporation entered into two intercompany loan agreements which mirror the terms of Xerox Holdings Corporation's 2029 and 2030 Senior Notes, including principal, interest rates, payment dates and debt issuance costs of approximately $15. As a result, Xerox Corporation recorded approximately $900 of related party debt. The proceeds of this new intercompany loan were used to partially pay down approximately $362 on the existing 2020 intercompany loan made by Xerox Holdings Corporation to Xerox Corporation.
At December 31, 2025 and 2024, the balance of the Intercompany Loan reported in Xerox Corporation’s Consolidated Balance Sheet was $1,993 and $2,022, respectively, which is net of related debt issuance costs, and the intercompany interest payable was $36 and $31, respectively.
Secured Borrowings and Collateral
In prior years, we had entered into secured loan agreements with various financial institutions where we sold finance receivables and rights to payments under our equipment on operating leases. In certain transactions, the sales were made to special purpose entities (SPEs), owned and controlled by Xerox, where the SPEs funded the purchase through amortizing secured loans from the financial institutions. The loans had variable interest rates and expected lives of approximately 2.5 years with half projected to be repaid within the first year based on collections of the underlying portfolio of receivables. For certain loans, we entered into interest rate hedge agreements to either fix or cap the interest rate over the life of the loan.
The sales of the receivables to the SPEs were structured as "true sales at law," and we received opinions to that effect from outside legal counsel. However, the transactions were accounted for as secured borrowings as we fully consolidated the SPEs in our financial statements. As a result, the assets of the SPEs were not available to satisfy any of our other obligations. Conversely, the credit holders of these SPEs did not have legal recourse to the Company’s general credit.
At December 31, 2024, we had borrowings of $70, which were secured by finance receivables of $58. These borrowings had an interest rate of 4.62%, and were expected to mature in 2026. During the first quarter 2025, the outstanding balance of $70 was repaid. Accordingly, there are no borrowings secured by finance receivables that are outstanding as of December 31, 2025.
Interest
Interest paid on our short-term and long-term debt amounted to $272, $214 and $201 for the years ended December 31, 2025, 2024 and 2023, respectively. Interest expense and interest income was as follows:
Year Ended December 31,
202520242023
Equipment financing interest(1)
$86 $106 $130 
Non-financing interest expense(1)(2)
248 119 68 
Interest expense$334 $225 $198 
Financing income(3)
$126 $151 $191 
Other interest income(3)
14 14 16 
Interest income$140 $165 $207 
_____________
(1)Equipment financing interest, which is included in Cost of services, maintenance, rentals and other, and non-financing interest expense, which is included in Other expenses, net, in the Consolidated Statements of (Loss) Income.
(2)Interest expense of Xerox Corporation included intercompany expense associated with the Xerox Holdings Corporation/Xerox Corporation Intercompany Loan of $136, $111 and $80 for the three years ended December 31, 2025, 2024 and 2023, respectively.
(3)Financing income, which is included in Services, maintenance, rentals and other, and other interest income, which is included in Other expenses, net, in the Consolidated Statements of (Loss) Income.
Equipment financing interest is determined based on an estimated cost of funds, applied against the estimated level of debt required to support our net finance receivables. The estimated cost of funds is based on the interest cost associated with actual borrowings determined to be in support of the leasing business. The estimated level of debt continues to be based on an assumed 7 to 1 leverage ratio of debt/equity as compared to our average finance receivable balance during the applicable period.