Ciena Corporation has closed its previously announced private offering of $2.875 billion aggregate principal amount of 0.00% convertible senior notes due 2031. The total offering includes $375 million aggregate principal amount of notes issued in connection with the initial purchasers' full exercise of their option to purchase additional notes. The notes are senior unsecured obligations that will not bear regular interest and will mature on September 15, 2031, unless earlier converted, redeemed, or repurchased.

The company utilized the net proceeds from the offering to execute convertible note hedge and warrant transactions, repay an approximately $1.14 billion term loan under its existing credit facility, and pay related fees and expenses. Additionally, Ciena repurchased approximately 0.3 million shares of its common stock concurrently with the offering. The remainder of the net proceeds is intended for investments to enhance supply chain capacity and general corporate purposes.

Ciena's Chief Financial Officer, Marc Graff, stated that the offering optimizes the capital structure and lowers overall interest expense. The convertible note hedge and warrant transactions mitigate potential dilution while raising the effective conversion price to $1,000 per share of Ciena common stock. Upon any conversions of notes, the company will pay up to the principal amount in cash, with any shares of common stock issued only to the extent the conversion value exceeds the principal amount.

The notes will be fully and unconditionally guaranteed, on a senior unsecured basis, by each wholly-owned domestic subsidiary of Ciena that currently or in the future guarantees its 4.00% senior notes due 2030 or any refinancing of such notes. The notes and guarantees were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933.

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