Conduent faces US$100m factoring deadline after US$447m refinancing

US business services group Conduent has completed a US$447m refinancing that extends its revolving credit maturities to May 2029 but introduces a significant new condition: the company must establish a qualifying receivables financing or securitisation facility of at least US$100m by the end of 2026.

The requirement, disclosed in a regulatory filing on 23 October, makes receivables finance an explicit part of Conduent’s wider debt restructuring rather than simply an optional source of working capital.

Under the transaction, Conduent has refinanced US$357m of existing revolving credit commitments and secured US$90m in additional commitments from existing lenders.

The new structure comprises US$75m of first-out revolving commitments, US$357m of second-out revolving facilities and a US$15m backstop facility for performance letters of credit. Bank of America is acting as administrative and collateral agent.

The new credit agreement specifies that failure to enter into a qualifying securitisation or receivables financing arrangement of at least US$100m by 31 December 2026 will constitute an event of default. Lenders may agree to extend that deadline by up to 45 days. The qualifying financing must also remain in place thereafter.

The filing does not establish that the required new financing has already been arranged.

For receivables financiers, the condition creates a clearly defined transaction opportunity with an unusually direct connection to the borrower’s broader capital structure. The eligible receivables, potential purchasers or lenders, pricing and proposed advance rates have not been disclosed.

The refinancing also provides greater visibility over Conduent’s borrowing costs. The first-out revolver carries a margin of four percentage points above term SOFR, while the second-out facilities carry a three-percentage-point margin. The company confirmed that no amounts had been drawn under the new first-out revolver at closing.

Conduent also used US$62m of proceeds from the sale of its Public Transit business to repay revolving debt.

Separately, the company expects its portfolio of surety bonds and letters of credit to fall by approximately US$550m following completion of its announced Tolling business sale. That reduction remains prospective.

The arrangement leaves Conduent with longer-dated revolving commitments, but its next financing milestone now depends on converting an identified pool of receivables into an acceptable source of institutional funding.