8-KMaterial AgreementsFinancial EventsExhibits & Filings

CIENA CORP 8-K Report, Material Agreement (Dec 31, 2012)

Filed December 31, 2012For Securities:CIEN

Summary

Ciena Corporation (CIEN) announced on December 27, 2012, the successful completion of an exchange of its 4.0% Convertible Senior Notes due 2015 for new 4.0% Convertible Senior Notes due 2020. This transaction, valued at $187.5 million, was conducted through private offerings and is exempt from registration under the Securities Act of 1933. The new notes extend the maturity date and offer a slightly different structure, including principal accretion at 1.85% annually, which will not bear interest or be convertible. This strategic move allows Ciena to refinance its existing convertible debt, effectively pushing out maturity obligations and potentially improving its capital structure. Investors should note the conversion price of the new notes is $20.385 per share, with a potential for a make-whole premium in shares or cash under certain conditions. The company has reserved approximately 9.2 million shares for potential issuance upon conversion, indicating a forward-looking approach to its equity structure.

Key Highlights

  • 1Ciena Corporation exchanged $187.5 million of its 2015 Convertible Senior Notes for an equal principal amount of new 2020 Convertible Senior Notes.
  • 2The new notes carry a 4.0% annual interest rate and mature on December 15, 2020.
  • 3The principal amount of the new notes will accrete at 1.85% annually, compounding semi-annually, starting December 27, 2012.
  • 4The accreted portion of the principal does not bear interest and is not convertible into common stock.
  • 5The initial conversion rate is 49.0557 shares per $1,000 principal amount, implying a conversion price of $20.385 per share.
  • 6Ciena has reserved 9,197,944 shares of common stock for issuance upon conversion of the new notes.
  • 7The exchange transactions were conducted as private offerings under an exemption from registration with the SEC.

Frequently Asked Questions

The main purpose of this filing was to report Ciena Corporation's entry into a material definitive agreement concerning the exchange of its existing convertible senior notes for new convertible senior notes.

The new notes have a principal amount of $187.5 million, mature on December 15, 2020, and bear a 4.0% annual interest rate. The principal will also accrete at 1.85% annually. They are convertible into Ciena's common stock at an initial rate of 49.0557 shares per $1,000 principal, equivalent to a conversion price of $20.385 per share.

The principal amount of the new notes will accrete at 1.85% per year, compounding semi-annually. Importantly, this accreted portion of the principal does not earn interest and is not convertible into shares of Ciena's common stock.

Holders can convert the notes at their option prior to maturity. Ciena may also elect to convert the notes under certain conditions. Upon conversion, especially in connection with fundamental changes, holders may receive a make-whole premium in cash or stock.