Reflecting continued confidence in Xerox's operational performance and strong financial results, Moody's Investors Service raised its rating of Xerox Corporation's (NYSE: XRX) senior unsecured debt two notches from B1 to Ba2.

Xerox also closed today its $500 million offering of senior unsecured notes due 2011 and bearing interest of 6.875 percent. The offering, which was announced last week, exceeded the company's initial expectations.

"The strength of our business - from a growing portfolio of leading products and services to a well executed business model that generates significant operating cash flow - is winning the confidence of and creating value for our stakeholders," said Lawrence A. Zimmerman, Xerox senior vice president and chief financial officer. "This upgrade from Moody's and the positive interest from investors are evidence that Xerox is delivering on all fronts and poised for continued success."

Zimmerman added that Xerox's financial position gives the company flexibility to access the markets on an opportunistic basis, like taking advantage of favorable conditions to lock in attractive long-term interest rates as it did with the recent senior note offering.

Last month Xerox reported second-quarter earnings of 21 cents per share, exceeding its expectations, and raised full-year earnings expectations to 80-84 cents per share. In the first half of the year, the company generated operating cash flow of about $500 million after contributing about $250 million to pension plans. Xerox said it remains on track to generate $1.5 billion of operating cash flow for the full year.