SAN JOSE, Calif. -- Oclaro, Inc. (the "Company") (OCLR) today announced that its wholly-owned subsidiary, Oclaro Luxembourg S.A. (the "Issuer"), priced its offering of $25,000,000 in aggregate principal amount of 7.50% Exchangeable Senior Secured Second Lien Notes due 2018 (the "Notes") to be sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The sale of the Notes is expected to close on December 14, 2012, subject to customary closing conditions.
The Notes will bear interest at a rate of 7.50% per year payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2013. The Notes will mature on June 15, 2018. The Indenture governing the Notes will contain covenants restricting the Company's ability and the ability of certain subsidiaries of the Company to incur debt, make certain restricted payments, create liens, sell or dispose of certain assets and enter into certain mergers or corporate transactions. The Issuer's obligations under the Notes will be guaranteed by the Company and certain of its domestic and foreign subsidiaries, and will be secured by second priority liens on substantially all the tangible and intangible assets of the Company, the Issuer and the guarantors.
The Notes may be exchanged prior to maturity (unless earlier redeemed or repurchased) at the option of the holder for shares of the Company's common stock at the initial exchange rate of 541.7118 shares of the Company's common stock per $1,000 in principal amount of Notes, which is equivalent to an initial exchange price of approximately $1.846 per share and represents an approximately 30% exchange premium over the last reported sale price of the Company's common stock on The NASDAQ Global Select Market of $1.42 on December 10, 2012.