01—Abstract
Summary
Summary of the 8-K filed October 18, 2010. Cited figures are marked; the original filing is the authoritative source.
CIENA CORP (CIEN) filed an 8-K on October 18, 2010, to report the completion of its sale of $350 milliona in aggregate principal amount of 3.75% Convertible Senior Notes due 2018.
These notes are senior unsecured obligations and rank equally with existing and future senior unsecured debt. The issuance provides Ciena with significant capital, with net proceeds estimated at approximately $340 millionb after expenses. Of the net proceeds, a substantial portion ($76.2 million) is allocated to repurchasing existing 0.25% Convertible Senior Notes due May 1, 2013.
The remaining funds are designated for general corporate purposes, including potential further repurchase of the 2013 notes. The convertible notes offer investors the potential to convert them into Ciena common stock at an initial conversion price of approximately $20.17c per share, with the possibility of conversion into approximately 17.36 million shares.
02—Key points
Key Highlights
- Ciena Corp. successfully issued $350 million in aggregate principal amount of 3.75% Convertible Senior Notes due 2018.
- The notes are senior unsecured obligations, ranking pari passu with other senior unsecured debt.
- Net proceeds from the offering are estimated at approximately $340 million.
- A portion of the proceeds ($76.2 million) will be used to repurchase $81.8 million in principal of existing 0.25% Convertible Senior Notes due May 1, 2013.
- The remaining proceeds are allocated for general corporate purposes, potentially including further repurchases of the 2013 notes.
- The Notes are convertible into Ciena common stock at an initial conversion price of approximately $20.17 per share.
- The Notes and underlying common stock are not registered under the Securities Act of 1933 and were sold to qualified institutional buyers under Rule 144A and Section 4(2).
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing?
This 8-K filing announces the completion of Ciena Corporation's sale of $350 million of its 3.75% Convertible Senior Notes due 2018. It details the terms of the notes, the use of proceeds, and the registration status of the securities.
How will Ciena use the proceeds from the note issuance?
Ciena estimates net proceeds of approximately $340 million. A significant portion, $76.2 million, will be used to repurchase $81.8 million in principal of its 0.25% Convertible Senior Notes due May 1, 2013. The remaining proceeds are for general corporate purposes, which may include further repurchases of the 2013 notes.
What are the key terms of the new Convertible Senior Notes?
The Notes mature on October 15, 2018, bear interest at 3.75% per annum, payable semi-annually. They are senior unsecured obligations. Holders have the option to convert them into Ciena common stock at an initial conversion rate of 49.5872 shares per $1,000 principal amount, implying an initial conversion price of approximately $20.17 per share.
Are the new notes and the underlying stock registered with the SEC?
No, the Notes and the shares of Ciena common stock issuable upon conversion have not been registered under the Securities Act of 1933. They were offered and sold to qualified institutional buyers in reliance on exemptions from registration, specifically Section 4(2) and Rule 144A.
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