Summary
Ciena Corporation (CIEN) has filed an 8-K report on November 18, 2003, announcing its intention to redeem all outstanding 5% Convertible Subordinated Notes due October 15, 2005. These notes, originally issued by ONI Systems Corp., were assumed by Ciena following its acquisition of ONI in June 2002. The total principal amount of these notes currently outstanding is approximately $48 million. This redemption, scheduled for December 19, 2003, represents a significant financial action. Ciena will pay noteholders 102% of the outstanding principal amount, plus any accrued interest, effectively retiring this debt obligation. Investors should note this action as it impacts the company's debt structure and cash outflow.
Key Highlights
- 1Ciena Corporation is initiating a full redemption of its 5% Convertible Subordinated Notes due October 15, 2005.
- 2The notes were originally issued by ONI Systems Corp. and assumed by Ciena after the acquisition of ONI in June 2002.
- 3Approximately $48 million in principal amount of these notes is currently outstanding.
- 4The redemption date is set for December 19, 2003.
- 5Ciena will pay noteholders 102% of the outstanding principal amount, plus accrued interest.
- 6This action aims to retire the outstanding convertible debt.
Frequently Asked Questions
The 8-K filing announces Ciena Corporation's decision to redeem all of its outstanding 5% Convertible Subordinated Notes due October 15, 2005.
The total principal amount of the outstanding notes being redeemed is approximately $48 million.
The redemption is scheduled to occur on December 19, 2003.
Noteholders will receive 102% of the outstanding principal amount of their notes, in addition to any accrued interest up to the redemption date.
While the filing doesn't explicitly state the reason, companies typically redeem debt to manage their capital structure, reduce interest expenses, or eliminate potential future dilution from convertible securities. This action suggests Ciena is proactively managing its debt obligations.