01—Abstract
Summary
Summary of the 8-K filed January 23, 2023. Cited figures are marked; the original filing is the authoritative source.
Ciena Corporation (CIEN) announced on January 23, 2023, that it has entered into an Incremental Joinder and Amendment Agreement to its existing Credit Agreement.
This agreement allows Ciena to incur a new senior secured term loan facility totaling $500 milliona, of which approximately $494 million was drawn net of fees and expenses on January 19, 2023. The proceeds from this new loan are designated for general corporate purposes, providing Ciena with additional financial flexibility.
02—Key points
Key Highlights
- Ciena has secured a new $500 million senior secured term loan.
- The net proceeds of approximately $494 million will be used for general corporate purposes.
- The new Incremental Term Loan matures on January 19, 2030, extending Ciena's debt maturity profile.
- The interest rate options for the new loan are SOFR + 2.50% (with a 0% floor) or Base Rate + 1.50% (with a 1.00% floor).
- The new loan has identical terms to the existing senior secured term loan, except for maturity, interest rate, amortization schedule, and prepayment provisions.
- Mandatory prepayments are tied to events such as asset sales, debt issuances, and excess cash flow, similar to the existing term loan.
- A prepayment premium of 1% applies if the new loan is repaid with proceeds from certain indebtedness before July 19, 2023.
03—Questions
Frequently Asked Questions
What is the primary purpose of this new $500 million term loan?
The primary purpose of the new $500 million senior secured term loan is to provide Ciena with additional capital for general corporate purposes, enhancing its financial flexibility.
When does this new loan mature, and how does it compare to the existing loan?
The new Incremental Term Loan matures on January 19, 2030, which is later than the existing term loan that matures on September 28, 2025. The new loan will amortize quarterly, with the balance due at maturity.
What are the interest rate options for the new term loan?
Ciena has two interest rate options for the new term loan: either SOFR plus a 2.50% margin (with a 0% floor) or a Base Rate plus a 1.50% margin (with a 1.00% floor).
Are there any prepayment penalties associated with this new loan?
Yes, a prepayment premium of 1% of the aggregate principal amount will be required if the Incremental Term Loan is repaid using proceeds from certain specified indebtedness prior to July 19, 2023. Otherwise, the loan is repayable at Ciena's election.
04—Continue