Summary
Ciena Corporation (CIEN) has executed a significant financing initiative through the amendment of its existing asset-based lending (ABL) facility and the establishment of a new term loan facility. The ABL facility has been enhanced with increased commitment levels, extended maturity, and more favorable terms, including a lower interest rate margin and a reduced minimum cash requirement. This strategic move provides Ciena with greater financial flexibility and improved borrowing capacity. The company has also secured a new $250 million term loan. The proceeds from this term loan are primarily intended to provide liquidity for the potential repayment of its 4.00% senior convertible notes due March 15, 2015. This proactively addresses potential conversion or repayment needs for these notes, ensuring financial stability and strategic options for Ciena.
Key Highlights
- 1Increased ABL facility commitment from $150 million to $200 million, with an option to extend to $250 million.
- 2Extended ABL facility maturity date from August 13, 2015, to December 31, 2016, removing an acceleration trigger related to convertible notes.
- 3Reduced minimum unrestricted cash requirement for the ABL facility from $200 million to $150 million.
- 4Lowered interest rate margin on ABL borrowings to a range of 150-200 basis points over LIBOR.
- 5Secured a new $250 million senior secured term loan facility.
- 6Net proceeds of approximately $246 million from the term loan will support potential repayment of convertible notes due March 2015 or be used for general corporate purposes.
- 7The Term Loan matures on July 15, 2019, and includes quarterly amortization payments.