Ciena closes $2.875 billion convertible notes offering

Ciena Corporation (NYSE: CIEN) completed its private offering of $2.875 billion in 0.00% convertible senior notes due 2031, the company announced. The offering included $375 million from the initial purchasers' full exercise of their option to purchase additional notes.

The telecommunications equipment company used the net proceeds to execute convertible note hedge and warrant transactions, repurchase approximately 0.3 million shares of common stock, repay about $1.14 billion of its existing term loan, and cover related fees and expenses. Ciena plans to use remaining proceeds for supply chain capacity investments and general corporate purposes.

The convertible note hedge and warrant structure raises the effective conversion price to $1,000 per share of Ciena common stock. Upon conversion, the company will pay up to the principal amount in cash, with common stock issued only if the conversion value exceeds the principal amount.

"Investor demand for our convertible notes offering enabled us to secure highly favorable economic terms for Ciena, lower our overall interest expense and enhance our financial flexibility as we scale the business," said Marc Graff, Ciena's Chief Financial Officer.

The notes carry a 0.00% interest rate and are guaranteed by Ciena's wholly-owned domestic subsidiaries that currently guarantee its 4.00% senior notes due 2030. The offering was conducted under Rule 144A to qualified institutional buyers.

The notes and any common stock issuable upon conversion have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption.

You May Also Be Interested In

• RH (RH) Tops Q1 EPS by 12c
• SEC proposes eliminating trade-through rule
• Greenland Energy adds Carol Craig to board of directors