Ciena calls ONI's 5% convertibles

New York, Nov. 18 - Ciena Corp. said it will redeem the 5% convertible subordinated notes due Oct. 15, 2005 originally issued by ONI Systems Corp.

The Linthicum, Md., network equipment company will redeem the convertibles at 102% of par plus accrued interest on Dec. 19.

Ciena assumed the notes when it acquired ONI in June 2002. There is $48 million of the notes outstanding.

Holders can convert the notes into Ciena common stock up to 5 p.m. ET on the business day immediately preceding the redemption date at a rate of 7.7525 shares per $1,000 principal amount. Ciena stock closed at $6.23 on Monday.

The redemption will save $2 million of cash over the remaining life of the notes, Ciena said, basing its calculation on the difference between the interest payments on the notes and the income generated from investing the principal at current rates of return.

Ciena will fund the redemption from cash, cash equivalents and short-term investments.

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