Ciena Taps Market for $1.5B
The shares were priced at $83.50, bringing the total amount of capital raised to $1.52 billion. This is more than the $1 billion that was originally planned (see Ciena Tests Capital Markets).
The deal answers the question of whether the capital markets are ready to open up to quality names in the optical sector. Rick Schafer, analyst at CIBC World Markets, says, “Despite the space being beat up lately, this shows that good deals will get done in this market. The window was open a crack, and now this opens it up even more for other deals in the pipe.”
The deals that he is referring to might be the upcoming Tellium Inc. IPO and the recently announced IPO by Riverstone Networks (see Riverstone Readies Its IPO ).
The bonds were offered as convertible notes with a 3.75 percent yield, exercizeable at $104.38. This means if Ciena’s stock price reaches above $104.38 then the bonds can be converted into stock but the bond-holder locks in the $104.38 price.
The offerings were underwritten by Goldman Sachs & Co. (NYSE: GS), Morgan Stanley Dean Witter, Banc of America Securities LLC, and Robertson Stephens.
-- Matt Malina, research associate, Light Reading http://www.lightreading.com