Ciena Capital seeks approval of $5 million DIP loan

By Jennifer Lanning Drey

Portland, Ore., Oct. 2 - Ciena Capital LLC requested court approval of a $5 million debtor-in-possession facility, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The lender is Allied Capital Corp., which owns about 95% of Ciena.

Allied is seeking interim access to $2 million of the financing.

The DIP loan will mature on the earlier of Jan. 5, 2009 and the effective date of a confirmed plan of reorganization.

Interest is 8% under normal circumstances and 13% if an event of default occurs.

Allied said the financing would allow it to operate its business while in bankruptcy.

Hearings have not yet been scheduled.

Ciena is a New York-based portfolio company for Allied Capital, a business development company that invests long-term debt and equity capital in middle market businesses. The company filed for bankruptcy on Sept. 30. Its Chapter 11 case number is 08-13783.

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