By Kenneth Lim
Boston, April 4 - Ciena Corp. has priced an upsized $300 million of seven-year convertible senior notes within talk with a coupon of 0.25% and an initial conversion premium of 15%.
The convertibles, which were offered at par, were talked to yield between 0.125% and 0.625% with an initial conversion premium of 10% to 15%. There is also an over-allotment option of a further $45 million. The original size of the deal was $250 million with a greenshoe option of $37.5 million.
Goldman Sachs and Co. was the bookrunner for the off-the-shelf deal.
Each convertible may initially be exchanged for 177.1009 Ciena shares, or $5.65 per share. Ciena stock closed at $4.91 on Tuesday.
The convertibles are non-callable for the first three years, after which they may be called only if Ciena's stock price exceeds 130% of the conversion price.
The notes will have dividend and takeover protection.
Ciena, a Linthicum, Md.-based communications network specialist, is using part of the net proceeds from the deal to buy a call spread option on its common stock to limit the potential dilution from the dilution of its convertible bonds. The rest of the proceeds will be used as working capital and for general corporate purposes, which may include buying back Ciena's outstanding 3.75% convertibles due 2008.
| Issuer: | Ciena Corp.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs and Co.
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| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | April 4, 2013
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 15%
|
| Conversion price: | $5.65
|
| Conversion ratio: | 177.1009
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable for first 3 years, thereafter call subject to 130% threshold
|
| Price talk: | 0.125%-0.625%, up 10%-15%
|
| Pricing date: | April 4
|
| Settlement date: | April 10
|
| Distribution: | Off shelf
|
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