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CIENA CORP 8-K Report, Material Agreement (Apr 26, 2016)

Reports
Material Agreements·Financial Events
Filing Date
Filed April 26, 2016
Period End
April 25, 2016
Security
CIEN
In the record · 2016–202610-K1010-Q338-K105

CIEN filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 105 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Aug ’19Aug ’19
  3. Material agreement8-K · Jan ’22Jan ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed April 26, 2016. Cited figures are marked; the original filing is the authoritative source.

CIENA CORP (CIEN) announced on April 26, 2016, the closing of an Incremental Joinder and Amendment Agreement to its existing Credit Agreement, dated July 15, 2014.

This agreement introduces a new tranche of senior secured term loans totaling $250 milliona, of which Ciena received approximately $246.1 million in net proceeds after fees and expenses on April 25, 2016. The primary purpose of this financing is to supplement Ciena's cash on hand and provide additional liquidity.

Specifically, these funds are intended to support the partial repayment of Ciena's 0.875%b senior convertible notes due June 15, 2017. This strategic move aims to strengthen the company's balance sheet and manage its upcoming debt obligations.

02—Key points

Key Highlights

  1. Ciena Corporation secured $250 million in new senior secured term loans under an amended Credit Agreement.
  2. Net proceeds of approximately $246.1 million were received on April 25, 2016.
  3. The new loan tranche matures on April 25, 2021.
  4. Proceeds are earmarked to partially repay Ciena's 0.875% senior convertible notes due June 15, 2017.
  5. The Incremental Term Loan amortizes quarterly at 0.25% of the principal amount.
  6. Interest rates are based on either LIBOR (with a 0.75% floor) plus a margin of 325-350 basis points, or a base rate (with a 1.75% floor) plus a margin of 225-250 basis points, depending on Ciena's leverage ratio.
  7. A 1% prepayment premium applies if the loan is repaid with proceeds from certain other debt before October 25, 2016.

03—Questions

Frequently Asked Questions

  1. What is the total amount of the new loan and how much did Ciena receive?

    Ciena entered into an agreement for a new tranche of senior secured term loans totaling $250 million. After deducting fees and expenses, Ciena received net proceeds of approximately $246.1 million on April 25, 2016.

  2. What is the intended use of the new loan proceeds?

    The net proceeds from this Incremental Term Loan are intended to supplement Ciena's cash on the balance sheet and provide additional liquidity. This liquidity will be used to support, in part, the repayment of Ciena's 0.875% senior convertible notes that are due on June 15, 2017.

  3. When does the new loan mature and how will it be repaid?

    The Incremental Term Loan matures on April 25, 2021. It will amortize in equal quarterly installments, with each installment being 0.25% of the original principal amount, and the remaining balance will be payable at maturity. It is also subject to mandatory prepayments similar to Ciena's existing senior secured term loan.

  4. What are the interest rate terms for the new loan?

    Ciena can elect for the interest rate to be either LIBOR plus a margin of 325 to 350 basis points (with a 0.75% LIBOR floor), or a base rate plus a margin of 225 to 250 basis points (with a 1.75% base rate floor). The specific margin is determined by Ciena's total net leverage ratio.

04—Continue

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