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Ciena Announces Proposed Private Sale of $250 Million in Convertible Senior Notes Due 2015.


 
Ciena[R] Corporation (NASDAQ: CIEN) announced that it intends to sell, subject to market and other conditions, approximately $250 million in aggregate principal amount of Convertible Senior Notes due 2015 (the "Notes"), in a private offering to qualified institutional buyers in reliance on an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"). The Notes will be Ciena's senior unsecured obligations and will rank equally with all of Ciena's other existing and future senior unsecured debt. The interest rate, conversion rate and other terms of the Notes will be determined at the time of pricing of the offering.

Ciena intends to use approximately $243.8 million of the net proceeds of this offering to replace its existing contractual obligation to issue $239 million in 6% senior convertible notes due 2017 as part of the aggregate purchase price for its pending acquisition of the optical networking and carrier Ethernet assets of Nortel's Metro Ethernet Networks (MEN) business. Ciena's agreement to acquire Nortel's MEN assets permits Ciena to elect, prior to closing, to replace the $239 million in 6% senior convertible notes due 2017 that are to be issued as part of the purchase price with cash equivalent to 102% of the face amount of the notes replaced, or $243.8 million. Ciena intends to use the remaining net proceeds, if any, from this offering to reduce the amount of cash on hand that it needs to fund the $530.0 million cash portion of the aggregate purchase price for the acquisition of Nortel's MEN assets. The offering of the Notes will not be conditioned on the closing of the acquisition, and if the acquisition is not completed, Ciena intends to use the net proceeds of the offering for general corporate purposes.

Keywords: Acquisitions, Data Management, Ethernet, Fiber-optic Network, Finance, Internet, Investing, Investment, Mergers, Mobile and Wireless, Networks, Optical Networking, Other Technology, Professional Services, Securities Act Of 1933, Software, Technology, Ciena Corporation.
This article was prepared by Computers, Networks & Communications editors from staff and other reports.

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