Anne Mulcahy, its chief executive and chairman, condemned the downgrading by Moodys Investors Service, which sent Xerox shares sliding 12%.

"Our performance shows we have significantly improved operations and strengthened our liquidity," she said.

"We have consistently and effectively executed every element of our turnaround plan and have set the stage for a return to full-year operational profitability."

Moodys dropped Xeroxs credit rating because of its heavy debt and the slender growth in revenue forecast. This could push up borrowing costs for Xerox, which is in talks with around 57 banks for 4.7bn of loans.

"The decision is inconsistent with the companys progress and momentum," added Mulcahy.

Xerox recently reported a net loss of 44m on 2.6bn revenue (PrintWeek, 26 April). But it has been mired in accounting scandals with a US watchdog and has had to redo its finance books.

Meanwhile the firm has launched the DocuColor Book Solution for production of short runs of books with colour on every page. Its DocuColor 2060 digital colour press comes with book finishing kit, software and professional services.

Xerox said the system would make the overall cost of digitally produced pre-edition books, including sales samples and review copies, "significantly less" than a comparable offset version, with the added benefit of being just-in-time.

The company said the DocuColor Book Solution was a "natural extension" of its DocuTech Production Publisher, the on-demand system for black-and-white books launched in 1990.

The system combines the DocuColor 2060 with the Creo Spire CSX200 colour server and provides PDF book file input and colour management.

Story by Jez Abbott