8-KMaterial AgreementsFinancial Events

CIENA CORP 8-K Report, Material Agreement (Feb 1, 2017)

Filed February 1, 2017For Securities:CIEN

Summary

Ciena Corporation (CIEN) announced on January 30, 2017, a significant refinancing of its existing term loans through an Omnibus Refinancing Amendment to its Credit Agreement. This strategic move consolidates two existing term loan tranches, totaling approximately $493.2 million in outstanding principal, into a single new term loan of $400 million. This refinancing aims to simplify Ciena's debt structure and extend its maturity profile. The new $400 million Refinancing Term Loan matures on January 30, 2022, extending the repayment timeline by several years for a portion of the debt. While the principal amount is reduced, investors should note the potential interest rate implications and repayment terms associated with the new loan. The company also repaid approximately $93.1 million of outstanding principal under the Existing Term Loans as part of this transaction, indicating a proactive approach to debt management.

Key Highlights

  • 1Ciena refinanced its existing term loans into a single new term loan.
  • 2The total outstanding principal amount of the refinanced debt was approximately $493.2 million across two tranches.
  • 3The new Refinancing Term Loan has an aggregate principal amount of $400 million.
  • 4The maturity date for the new term loan has been extended to January 30, 2022.
  • 5Ciena repaid approximately $93.1 million of the outstanding principal as part of the refinancing.
  • 6The new term loan carries specific interest rate options (LIBOR + 2.50% or Base Rate + 1.50%) with floors.
  • 7A 1% prepayment premium applies if the Refinancing Term Loan is repaid with proceeds from certain new indebtedness before July 30, 2017.

Frequently Asked Questions

The main purpose of this 8-K filing is to report Ciena Corporation's entry into a material definitive agreement, specifically an Omnibus Refinancing Amendment to its Credit Agreement. This amendment refinances the company's existing term loans into a single, new term loan.

The new Refinancing Term Loan consolidates two existing term loans into one $400 million facility maturing on January 30, 2022. This is a change from the previous structure where there were two separate tranches with different maturity dates (July 15, 2019, and April 25, 2021). Additionally, the new loan has specific amortization and interest rate terms, and a potential prepayment premium under certain conditions.

Yes, Ciena reduced its overall debt by approximately $93.2 million through this refinancing. The combined outstanding principal of the existing term loans was about $493.2 million, which was refinanced into a single $400 million term loan, with an additional $93.1 million in principal being repaid directly.

Ciena has two options for the interest rate on the Refinancing Term Loan. The first option is a per annum rate equal to LIBOR plus an applicable margin of 2.50%, subject to a 0.75% LIBOR floor. The second option is a base rate plus an applicable margin of 1.50%, subject to a 1.75% base rate floor. The actual interest cost will depend on Ciena's choice and prevailing market rates.