Ciena seals $150 million three-year asset-based revolver for LoC use

By Susanna Moon

Chicago, Aug. 15 - Ciena Corp. obtained a $150 million three-year senior secured asset-based revolving credit facility, with the total amount available for issuances of letters of credit.

Ciena may boost the total size to $200 million, with additional commitments.

The loan terms allow for both swingline loans and Canadian dollar-denominated loans to Ciena's Canadian subsidiary of up to $20 million.

Interest on the loans will range from Libor plus 200 basis points to 250 bps with an unused fee of 37.5 bps or 50 bps.

The company and some of its subsidiaries, including Ciena Communications, Inc. and Ciena Canada, Inc., entered into the credit agreement on Monday with Deutsche Bank AG New York Branch, as administrative agent and collateral agent, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the syndication agent, and Morgan Stanley Senior Funding, Inc. and Wells Fargo Bank, NA are the co-documentation agents.

Proceeds will be used to support the issuance of letters of credit, allowing the company to reduce the use of cash to support and collateralize these instruments, the filing noted.

More credit terms

At closing, Ciena transferred some outstanding letters of credit with an undrawn face amount of about $41 million to the facility. There were no other amounts outstanding under the facility.

The facility matures on Aug. 13, 2015, unless some the company's bonds are still outstanding, in which case the agreement will mature

• On Jan. 31, 2013 if any of Ciena's 0.25% senior convertible notes due May 1, 2013 are then outstanding and Ciena is unable to meet financial criteria for its cash position at that time; or

• On Dec. 15, 2014 if any of Ciena's 4% senior convertible notes due March 15, 2015 are then outstanding.

Availability under the facility will be based upon monthly or, in some cases, weekly borrowing base certifications valuing the borrowers' eligible inventory and eligible accounts receivable, as reduced by reserves in effect from time to time.

Under the terms, Ciena must maintain a minimum fixed charge coverage ratio of at least 1.0 times at the end of any period of four fiscal quarters when excess availability under the facility is less than the greater of (i) 12.5% of availability or (ii) $15 million.

Ciena is also required to maintain at all times at least $200 million of unrestricted cash and cash equivalents.

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

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