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20 February 2015

Oclaro completes placement of $65m of 6% convertible notes

Oclaro Inc of San Jose, CA, USA (which provides components, modules and subsystems for optical communications) has announced the completion of its private placement of $65m of 6% convertible senior notes due 2020. This includes the purchase of $10m of notes by the initial purchaser exercising its overallotment option. The notes were offered and sold to qualified institutional buyers, by the initial purchaser. 

The notes will mature on 15 February 2020 and will bear interest at a fixed rate of 6.00% per year, payable on 15 February and 15 August of each year, beginning 15 August 2015.

The notes will be general senior, unsecured obligations of Oclaro. They will not be redeemable at Oclaro's option prior to 15 February 2018. On or after 15 February 2018, the notes will be redeemable at Oclaro's option if the last reported sale price of the firm's common stock for at least 20 trading days (which need not be consecutive) in any 30 trading day period exceeds 130% of the conversion price for the notes.

The redemption price will equal 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest, including additional interest (if any) up to, but excluding, the redemption date plus the sum of the present values of each of the remaining scheduled payments of interest that would have been made on the notes being redeemed had they remained outstanding from the redemption date to the maturity date.

In addition, upon the occurrence of a fundamental change, holders of the notes will have the right, at their option, to require Oclaro to repurchase their notes in cash at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest up to (but excluding) the fundamental change repurchase date.

The notes will be convertible, at the option of the holders, into consideration consisting of shares of Oclaro's common stock (and cash in lieu of fractional shares) at any time prior to the close of business on the day immediately preceding the maturity date.

The initial conversion rate is 512.8205 shares of Oclaro's common stock per $1000 of notes (equivalent to about $1.95 per share). The conversion rate will be subject to adjustment upon the occurrence of certain events. In addition, Oclaro may be obligated to increase the conversion rate for any conversion that occurs in connection with a make-whole fundamental change and with Oclaro's delivery of a notice of redemption for the notes.

The net proceeds to Oclaro from the private placement were about $61.1m, after deducting the initial purchaser's discounts and commissions and estimated offering expenses. Oclaro intends to use the net proceeds for general corporate purposes, including working capital.

See related items:

Oclaro prices $55m of 6% convertible notes

Oclaro announces proposed offering of $55m of notes

Oclaro's core communications revenue grows 4% quarter-to-quarter

Tags: Oclaro

Visit: www.oclaro.com

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