8-KMaterial AgreementsExhibits & Filings

CIENA CORP 8-K Report, Material Agreement (Oct 21, 2010)

Filed October 21, 2010For Securities:CIEN

Summary

CIENA CORP (CIEN) filed an 8-K on October 21, 2010, primarily reporting on two significant events that occurred on October 18, 2010. The company successfully closed a private offering of $350 million aggregate principal amount of 3.75% Convertible Senior Notes due 2018. These notes are senior unsecured obligations and will mature on October 15, 2018, bearing interest payable semi-annually. This issuance represents a key financing activity for the company. In addition, the filing addresses a potential early termination of a lease agreement for a building on Nortel Networks' Ottawa Carling Campus. Nortel announced an agreement to sell this campus, with a condition that Nortel will exercise its early termination rights on Ciena's lease for the 'Lab 10' building. If exercised, Ciena is entitled to receive a $33.5 million early termination fee, which would be paid from funds Ciena previously paid for Nortel's Metro Ethernet Networks business assets.

Key Highlights

  • 1Ciena Corporation closed a $350 million offering of 3.75% Convertible Senior Notes due 2018.
  • 2The notes are senior unsecured obligations of Ciena.
  • 3Interest on the notes is payable semi-annually at a rate of 3.75% per annum.
  • 4The notes mature on October 15, 2018.
  • 5Nortel Networks intends to exercise early termination rights on Ciena's lease for the 'Lab 10' building at the Carling Campus.
  • 6Ciena is entitled to a $33.5 million early termination fee upon exercise of these rights.
  • 7The termination fee is expected to be paid from funds related to Ciena's acquisition of Nortel's Metro Ethernet Networks assets.

Frequently Asked Questions

The 8-K filing indicates that the convertible senior notes were issued in a private offering. While the specific use of proceeds is not detailed in this particular filing, such issuances are typically used for general corporate purposes, debt repayment, acquisitions, or to bolster working capital.

The potential early termination of the lease for the 'Lab 10' building is significant because Ciena is slated to receive a substantial early termination fee of $33.5 million. This fee could provide a positive cash inflow and offset any disruption caused by the lease ending earlier than its original 10-year term.

The filing states that Ciena would be entitled to receive the payment within three business days of Nortel's delivery of an early termination notice. Ciena has not yet received formal notice but expects it upon the completion of Nortel's sale of the Carling Campus.

Yes, the notes are Ciena's senior unsecured obligations and rank equally with all of Ciena's other existing and future senior unsecured debt.