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CIENA CORP 8-K Report, Corporate Update (Sep 20, 2018)

Reports
Other Events·Exhibits & Filings
Filing Date
Filed September 20, 2018
Period End
September 20, 2018
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 September 20, 2018. Cited figures are marked; the original filing is the authoritative source.

Ciena Corporation (CIEN) has announced its intent to exercise its option to convert its outstanding 4.0% Convertible Senior Notes due 2020, with a principal amount of $187.5 milliona, into shares of Ciena common stock.

This conversion is scheduled to take effect on October 31, 2018. The company anticipates issuing approximately 9.2 million shares of common stock as a result of this conversion, at which point the notes will no longer be outstanding. In connection with this conversion, Ciena has elected to settle the "make-whole" provision, which typically entitles noteholders to additional shares, by paying cash instead of issuing more stock.

The exact cash amount will be determined prior to the conversion date. This action will impact the company's outstanding share count and potentially its financial leverage as the convertible debt is extinguished.

02—Key points

Key Highlights

  1. Ciena Corp. is exercising its option to convert $187.5 million of its 4.0% Convertible Senior Notes due 2020 into common stock.
  2. The conversion is set to occur on October 31, 2018.
  3. Approximately 9.2 million shares of Ciena common stock are expected to be issued upon conversion.
  4. The 2020 Convertible Senior Notes will cease to be outstanding after the conversion.
  5. Ciena will pay cash in lieu of issuing additional shares related to the 'make-whole' provision in the note indenture.
  6. The cash amount for the make-whole provision will be determined before the conversion date.
  7. This event signals a change in Ciena's capital structure, moving from convertible debt to equity.

03—Questions

Frequently Asked Questions

  1. What is the significance of Ciena exercising its option to convert the 2020 Notes?

    Ciena is choosing to convert its outstanding convertible debt into equity. This means the $187.5 million principal amount of 4.0% Convertible Senior Notes due 2020 will be settled by issuing new shares of Ciena common stock, effectively reducing the company's debt and increasing its outstanding share count.

  2. How will the 'make-whole' provision affect the conversion?

    The 'make-whole' provision in the indenture typically compensates noteholders with additional shares if the conversion happens under certain conditions. Ciena has elected to pay cash instead of issuing these additional shares, which avoids further dilution but will result in a cash outflow for the company.

  3. What is the expected impact on Ciena's share count?

    Ciena expects to issue approximately 9.2 million shares of its common stock upon conversion. This will increase the total number of outstanding shares, which could affect earnings per share (EPS) calculations if not accompanied by a proportional increase in net income.

  4. When will this conversion take place and what is the new debt status?

    The conversion is scheduled for October 31, 2018. After this date, the 4.0% Convertible Senior Notes due 2020 will no longer be outstanding, as they will have been converted into equity.

04—Continue

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