ITEM 1.01 – ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Pursuant to a Credit Agreement, dated July 15, 2014, as amended (the “Credit Agreement”), by and among Ciena Corporation (“Ciena”), the lenders party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”), Ciena maintains an existing senior secured term loan with an outstanding aggregate principal amount as of January 19, 2023 of $694 million and maturing on September 28, 2025 (the “Existing Term Loan”).
On January 19, 2023 (the “Closing Date”), Ciena, as borrower, and Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC and Blue Planet Software, Inc., as guarantors, entered into an Incremental Joinder and Amendment Agreement to the Credit Agreement with the lenders party thereto and the Administrative Agent (the “Incremental Agreement”), pursuant to which Ciena incurred a new tranche of senior secured term loans in an aggregate principal amount of $500 million (the “Incremental Term Loan”). On the Closing Date, Ciena received Incremental Term Loan proceeds of approximately $494 million net of fees and expenses. The net proceeds of the Incremental Term Loan will be used for general corporate purposes. The Incremental Agreement amends the Credit Agreement and provides that the Incremental Term Loan will, among other things:
| | • | | mature on January 19, 2030; |
| | • | | amortize in equal quarterly installments in aggregate amounts equal to 0.25% of the principal amount of the Incremental Term Loan as of the Closing Date, with the balance payable at maturity; |
| | • | | be subject to mandatory prepayment on the same basis as the Existing Term Loan, including upon the occurrence of certain specified events such as asset sales, debt issuances, and receipt of annual Excess Cash Flow (as defined in the Credit Agreement); |
| | • | | bear interest, at Ciena’s election, at a per annum rate equal to (a) SOFR (subject to a floor of 0.00%) plus an applicable margin of 2.50% or (b) a base rate (subject to a floor of 1.00%) plus an applicable margin of 1.50%; |
| | • | | be repayable at any time at Ciena’s election, provided that repayment of the Incremental Term Loan with proceeds of certain indebtedness prior to July 19, 2023 will require a prepayment premium of 1% of the aggregate principal amount of such prepayment; and |
| | • | | except as described above or otherwise set forth in the Incremental Agreement, have identical terms as the Existing Term Loan. |
Except as amended by the Incremental Agreement, the remaining terms of the Credit Agreement remain in full force and effect.
The foregoing summary description of the terms of the Incremental Agreement is qualified by reference to the Incremental Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
