Ciena® Corporation (NASDAQ:CIEN), the network specialist, today announced that it has priced an offering of $450 million aggregate principal amount of its Convertible Senior Notes due 2017, pursuant to a registration statement filed with the Securities and Exchange Commission. In addition, the underwriter has been granted an option to purchase up to an additional $50 million aggregate principal amount of Notes from Ciena solely to cover overallotments. The Notes will be senior unsecured obligations and will rank equally with all of Ciena’s other existing and future senior unsecured debt. The Notes will bear interest at the rate of 0.875% per annum from June 11, 2007, payable semi-annually on June 15 and December 15, commencing on December 15, 2007.
The Notes may be converted prior to maturity (unless earlier repurchased) at the option of the holder into shares of Ciena common stock at the initial conversion rate of 26.2154 shares of Ciena common stock per $1,000 in principal amount of Notes, which is equal to an initial conversion price of approximately $38.15 per share. The Notes are not redeemable prior to maturity. The closing of the offering is expected to occur on June 11, 2007, subject to the satisfaction of customary closing conditions.
Ciena is using a portion of the net proceeds of this offering to enter into a convertible note hedge involving a capped call option on its common stock with an affiliate of the underwriter. The convertible note hedge is expected to reduce the potential dilution from conversion of the Notes.
Ciena expects to use the remaining net proceeds for general corporate purposes. These purposes may include the repurchase of all or a portion of its outstanding 3.75% Convertible Notes due February 1, 2008 or the repayment of the principal amount of those notes at maturity.
The sole book-running manager of the offering is Deutsche Bank Securities Inc. A copy of the prospectus and prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933 may be obtained from Deutsche Bank Securities Inc. by writing to it at Deutsche Bank Securities Prospectus Department, 100 Plaza One, Second Floor, Jersey City, NJ 07311, or by calling 800-503-4611.
About Ciena
Ciena Corporation is the network specialist, focused on expanding the possibilities for its customers’ networks while reducing their cost of ownership. The Company’s systems, software and services target and cure specific network pain points so that telcos, cable operators, governments and enterprises can best exploit the new applications that are driving their businesses forward. For more information, visit www.ciena.com.
Note to Investors
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date hereof; and Ciena's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q, that Ciena filed with the Securities and Exchange Commission on June 1, 2007. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward looking statements in this release include expectations regarding Ciena's use of proceeds and expected reduction of potential dilution from conversion of the Notes. Ciena assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
