Ciena said it plans to raise $2.0 billion through a private offering of convertible senior notes due 2031, with an option for initial purchasers to buy an additional $300 million. If that full option is exercised, the deal size would rise to $2.3 billion.
The company said it expects to use a portion of the proceeds to fund convertible note hedge transactions and to repurchase up to $140 million of its common stock under its existing buyback program. It also plans to use about $1.14 billion of the remaining proceeds to pay down amounts outstanding under its term loan, along with related fees and expenses. Any leftover proceeds would go toward general corporate purposes, including investments to expand supply chain capacity.
The notes would mature on Sept. 15, 2031. Ciena said the notes would not be redeemable before Sept. 20, 2029, except for a cleanup redemption if less than 10% of the original principal remains outstanding and other conditions are met. After Sept. 20, 2029, the company can redeem the notes, in whole or in part, subject to certain conditions.
The company said it may issue shares, cash, or a combination of both if notes are converted, with cash paid up to the principal amount and any excess settled at its election. It also said it expects to enter into hedge and warrant transactions covering the same number of shares initially underlying the notes, a structure intended to offset dilution from conversions, though the warrants could create dilution if Ciena’s share price rises above the strike price.
Ciena said the notes and guarantees are being sold in a private offering to qualified institutional buyers. Today the company's shares have moved -5.03% to a price of $463.66. Check out the company's full 8-K submission here.
