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24 May 2013

Infinera prices offering of convertible senior notes to raise $135m

Infinera Corp of Sunnyvale, CA, USA, a vertically integrated manufacturer of digital optical network systems incorporating its own indium phosphide-based photonic integrated circuits (PICs), has now priced its offering of aggregate principal amount of its 1.75% convertible senior notes due 2018 (announced on 22 May) to raise $135m.

The notes are being offered in a private placement to qualified institutional buyers (pursuant to Rule 144A under the Securities Act of 1933, as amended).

Infinera has also now granted the initial purchasers a 30-day option to purchase up to an additional $15m aggregate principal amount of the notes on the same terms and conditions to cover overallotments, if any. Interest on the notes will be paid semi-annually at a rate of 1.75% per year, and the notes will mature on 1 June 2018, unless repurchased or converted earlier.

Holders may require Infinera to repurchase their notes upon a fundamental change at a purchase price equal to the principal amount plus accrued and unpaid interest up to, but excluding, the repurchase date. Infinera may not redeem the notes prior to maturity.

Subject to the satisfaction of certain conditions, the notes will be convertible into cash, shares of Infinera common stock, or a combination of the two, at Infinera’s option. The initial conversion rate per $1000 principal amount of notes is equivalent to 79.4834 shares, i.e. a conversion price of about $12.58 per share (subject to adjustment in certain circumstances). This initial conversion price represents a premium of 37.5% relative to the last reported sale price of Infinera's common stock on 23 May of $9.15 per share.

Infinera expects to use the net proceeds of the offering for general corporate purposes, including working capital and potential strategic projects.

The offering is expected to close on 30 May, subject to customary closing conditions.

Tags: Infinera


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