Ciena Prices $375 Million in Convertible Senior Notes Due 2015

Linthicum, MD — 03/09/2010

Ciena® Corporation (NASDAQ:CIEN, news, filings) today announced that it has priced an offering of $375 million aggregate principal amount of its Convertible Senior Notes due 2015 (the “Notes”), in a private offering to qualified institutional buyers in reliance on an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”).  The Notes will be Ciena’s senior unsecured obligations and will rank equally with all of Ciena’s other existing and future senior unsecured debt.  The Notes will bear interest at the rate of 4% per annum from the date of issuance, payable semi-annually on March 15 and September 15, commencing on September 15, 2010.  The Notes will mature on March 15, 2015.

The Notes may be converted prior to maturity (unless earlier redeemed or repurchased) at the option of the holder into shares of Ciena common stock at the initial conversion rate of 49.0557 shares of Ciena common stock per $1,000 in principal amount of Notes, which is equal to an initial conversion price of approximately $20.38 per share and represents a 35% conversion premium over the closing price of Ciena common stock of $15.10 on March 8, 2010.  The closing of the offering is expected to occur on March 15, 2010, subject to the satisfaction of customary closing conditions.

Ciena intends to use approximately $243.8 million of the net proceeds of this offering to replace its existing contractual obligation to issue 6% senior convertible notes due 2017 as part of the aggregate purchase price for its pending acquisition of the optical networking and carrier Ethernet assets of Nortel’s Metro Ethernet Networks (MEN) business.  Ciena’s agreement to acquire Nortel’s MEN assets permits Ciena to elect, prior to closing, to replace the $239 million in 6% senior convertible notes due 2017 that are to be issued as part of the purchase price with cash equivalent to 102% of the face amount of the notes replaced, or $243.8 million.  Ciena intends to use the remaining net proceeds from this offering to reduce the amount of cash on hand that Ciena needs to fund the $530.0 million cash portion of the aggregate purchase price for the acquisition of Nortel’s MEN assets.  The offering of the Notes is not conditioned on the closing of the acquisition, and if the acquisition is not completed, Ciena intends to use the net proceeds of the offering for general corporate purposes.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.  The Notes and the shares of Ciena common stock issuable upon conversion of the Notes will not be registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from registration requirements.

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