Nomura Comments On Ciena (CIEN) Refinancing

This morning Ciena Corporation (NASDAQ: CIEN) entered into separate, privately negotiated exchange agreements under which it will retire $187.5 million in aggregate principal amount of its outstanding 4.0% Convertible Senior Notes due 2015 in exchange for its issuance of a new series of 4.0% Convertible Senior Notes due 2020 in an aggregate original principal amount of $187.5 million. The deal essentially extends $187.5 million in debt maturities by five years.

"From a cash flow perspective, it provides Ciena greater flexibility in managing its cash and cash flow over the next three to five years. By extending $188mn in bond maturities by five years, it helps to bolster the gross cash on its balance sheet over the intermediate term, which could be beneficial for Ciena in demonstrating its financial stability with operators in negotiating long-term deals," said Nomura analyst Stuart Jeffrey.

With a broader view, Jeffrey said "Ciena is one of the leading beneficiaries of the industry shift from legacy to next-generation optical technologies, plus the growing adoption of 100G optical networks. Given its exposure to next-generation optical and 100G technologies, we expect Ciena to grow faster than the 5-7%."

Nomura Securities has a Buy rating on CIENA (NASDAQ: CIEN) with a price target of $17.50.

For an analyst ratings summary and ratings history on CIENA click here. For more ratings news on CIENA click here.

Shares of CIENA closed at $15.64 yesterday.

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