# Ciena borrowed $2.88bn at zero interest — and the $230.0m tax asset never touched the income statement

![Ciena borrowed $2.88bn at zero interest — and the $230.0m tax asset never touched the income statement](https://aiswingx.com/static/covers/cien-fy26q3_cover.jpg?v=1790171511)

**FY2026 Q3 10-Q: alongside notes that pay no interest at all, the company paid $988.4m for one contract and received $873.4m for another on the same day. A tax election on that structure created a $230.0m deferred tax asset, booked against paid-in capital rather than profit**

Note 13 of the third-quarter report Ciena (CIEN) filed on September 3 sets out three contracts entered on a single day, June 11. Notes of $2.88bn bearing 0.00% interest; a contract the company paid $988.4m for; a contract it received $873.4m for. The same note records that a tax election on this structure produced a $230.0m deferred tax asset, with the offsetting entry in equity.

- 종목: CIEN (Ciena Corporation)
- 분기: FY26Q3 · 10-Q
- 작성: 2026-09-23 13:52 UTC
- 원문: https://aiswingx.com/p/cien-fy26q3

## 숫자 하나
$2.88bn of 0.00% notes due 2031, issued June 11. $988.4m paid and $873.4m received on the accompanying contracts. A $230.0m deferred tax asset recorded with a corresponding adjustment to additional paid-in capital.

## 비유 하나
(구독자 전용)

## 출처 하나
Ciena Corporation Form 10-Q (fiscal 2026 third quarter, filed 2026-09-03, accession 0001628280-26-060361): Note 13, Short-Term and Long-Term Debt (2031 Notes, 2031 Hedge Transactions, 2031 Warrant Transactions); Note 6, Income Taxes; Note 12, Derivatives; Note 20, Stock Repurchases; Note 21, Subsequent Events; consolidated balance sheet. Quarterly figures cross-checked against SEC XBRL Company Facts.

## 다음 분기에 볼 것
(구독자 전용)

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## What happened

Ciena (CIEN) makes networking equipment. Its main products carry data as light over long-haul routes and between datacentres. Its fiscal year ends in late October or early November.

Note 13 of the third-quarter report filed on September 3 sets out **three contracts entered on one day, June 11**.

The striking figure is the coupon. The company issued **$2.88bn of notes due 2031**, and the note states that they **"will not bear regular interest and the principal amount will not accrete."** The rate is **0.00%**.

One more sentence closes the section. The company made a tax election that treats the notes and the accompanying contract as one, and recorded a **$230.0m deferred tax asset** as a result. The offsetting entry is not in the income statement but in **additional paid-in capital**. It went directly into an equity line, which means that $230.0m **does not appear anywhere in the quarter's earnings**.

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## FAQ

**Q. Can a company borrow at zero interest?**

It can, if it attaches the right to convert into shares. The 10-Q states that these notes bear no regular interest and that the principal does not accrete. The trade-off is that the share count rises if the price passes the conversion price.

**Q. Did the $230.0m tax asset increase profit?**

No. The 10-Q records the offsetting entry in additional paid-in capital. It does not pass through the income statement, so it is absent from the quarter's earnings.

**Q. How much did the company pay and receive?**

The note gives both amounts for the contracts entered the same day. The two figures, the difference between them and each contract's strike are tabled in the subscriber section.

**Q. What is Ciena paying for its own shares?**

Note 20 and the subsequent events note give share counts and average prices by period. Set beside the strikes on the accompanying contracts the spread is visible; the subscriber section compares them.

**Q. Where can I check this myself?**

On SEC EDGAR, open Ciena Corporation's fiscal 2026 third-quarter 10-Q (accession 0001628280-26-060361) and read Note 13 and Note 21.