Ciena to pay $112 million above par for $288 million notes due 2018

By Devika Patel

Knoxville, Tenn., Aug. 30 – Ciena Corp. intends to pay $112 million more than the face value of its $288 million of notes due October 2018 at maturity, since the notes are trading above par.

“We want to update you today on our plans with respect to our 2018 notes, which mature in October,” senior vice president of finance and chief financial officer James E. Moylan, Jr. said on the company’s third quarter ended July 31 earnings conference call on Thursday.

“Previously, we indicate our intent to settle in cash the $288 million face value of the new 2018 notes upon maturity,” Moylan said.

The notes are trading at higher prices than their face value.

“Given our current stock price, the market value of these notes will likely exceed their face value at maturity,” he said.

“As a result, we’ve decided to settle in cash up to $112 million of the market value in excess of the face value of these notes upon maturity,” Moylan said.

The repurchase of the notes is essentially a share repurchase.

“This effectively represents an additional repurchase of shares in that amount,” Moylan said.

“Taken together with our ongoing share repurchase activity, these steps are strong indicators of our confidence in the business and our continued commitment to managing dilution and returning capital to stockholders,” he said.

Free cash flow totaled $69.7 million in the third quarter.

Cash and cash equivalents were $726,214,000 as of July 31, 2018, compared to $640,513,000 as of Oct. 31, 2017.

Ciena is a Linthicum, Md.-based supplier of communications networking equipment and software.

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