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 fully exercised, the deal would total $2.3 billion.
The company said it intends to use the proceeds in several specific ways: paying the net cost of convertible note hedge transactions, funding up to $140 million of share repurchases under its existing buyback program, and repaying about $1.14 billion of term loan borrowings under its credit facility. The remainder would go to general corporate purposes, including investments to expand supply chain capacity.
The notes would mature on Sept. 15, 2031. Ciena said they would not be redeemable before Sept. 20, 2029, except in a cleanup redemption scenario, and would become convertible only under certain conditions before June 15, 2031, then at any time until two trading days before maturity.
Alongside the offering, Ciena expects to enter into convertible note hedge transactions covering the same number of shares initially underlying the notes, and warrant transactions tied to the same share count. If the underwriters exercise the extra $300 million option, Ciena said it expects to add more hedge and warrant transactions on the same terms.
The company also said the note structure is intended to support the financing while limiting dilution from conversion, though the warrants could create dilution if Ciena’s stock trades above the strike price. Following these announcements, the company's shares moved -5.46%, and are now trading at a price of $461.55. For more information, read the company's full 8-K submission here.
