Ciena Corporation announced the closing of its private offering of $2.875 billion in 0.00% Convertible Senior Notes due 2031, which included the full exercise of the initial purchasers' option to acquire an additional $375 million in notes. The company received approximately $2.72 billion in net proceeds, which it used to repurchase common stock, repay a term loan, and for general corporate purposes. Concurrently, Ciena amended its credit agreement to extend the maturity of its revolving credit facility.
Key Details
- Offering Size & Terms: The offering consisted of $2.875 billion in aggregate principal amount of 0.00% Convertible Senior Notes maturing on September 15, 2031. The notes have an initial conversion price of approximately $746.66 per share.
- Use of Proceeds: Net proceeds of approximately $2.72 billion were used to repurchase $140.0 million of its common stock, repay approximately $1.14 billion outstanding under its senior secured term loan, and for general corporate purposes.
- Hedging Transactions: The company entered into convertible note hedge and warrant transactions, which are expected to reduce potential dilution upon conversion and effectively increase the conversion price to $1,000 per share.
- Credit Agreement Amendment: Ciena extended the maturity of its $300 million senior secured revolving credit facility from October 24, 2028, to October 24, 2030.