Ciena corporation, ciena canada, inc., ciena communications, inc. and ciena government solutions, inc. enter into an abl credit agreement

On october 28, 2019 ciena corporation and certain of its subsidiaries, including ciena canada, inc., ciena communications, inc. and ciena government solutions, inc. (with ciena, collectively, the “borrowers”), entered into an abl credit agreement with the lenders party thereto and bank of america, n.a., as administrative agent, which replaces the deutsche bank credit agreement. the credit agreement provides for a senior secured asset-based revolving credit facility of up to $300 million. ciena has the option to increase the total revolving commitments under the credit facility to $450 million, subject to certain conditions, including obtaining commitments from one or more lenders. the credit agreement provides that $200 million of the credit facility is available for issuances of letters of credit, and allows for both (x) swingline loans in an amount not to exceed $20 million in respect of u.s. dollar-denominated swing line loans and $2 million in respect of canadian dollar-denominated swing line loans and (y) canadian dollar-denominated loans to the canadian borrower in an amount not to exceed $20 million. ciena expects to use the credit facility to support the issuance of letters of credit that arise in the ordinary course of its business and for general corporate purposes. availability under the credit facility will be based upon monthly (or weekly or quarterly, in certain cases) borrowing base certifications valuing the borrowers’ eligible inventory, eligible cash and eligible accounts receivable, as reduced by certain reserves in effect from time to time. outstanding borrowings under the credit facility accrue interest at a per annum rate equal to, at the borrowers’ election, (x) libor plus a margin ranging from 1.25% to 1.50% or (y) a base rate plus a margin ranging from 0.25% to 0.50%, in each case, with the actual margin determined according to the borrowers’ utilization of the credit facility. the commitment fee payable on the unused portion of the credit facility equals 0.25% per annum, and the borrowers will pay customary letter of credit fees.
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