Ciena Capital Declares Bankruptcy

NEW YORK CITY-Ciena Capital, a local provider of commercial real estate financing and factoring services, has filed for chapter 11 relief in the US Bankruptcy Court for the Southern District of New York, according to a statement by its major investor, Washington, DC-based Allied Capital. Although it will continue to operate its servicing business and, shielded by bankruptcy will be able to dispose of its assets in an orderly fashion when the markets improve, Ciena Capital joins the growing credit-market-freeze body count--and by extension, Allied Capital will be feeling some heat as well. Ciena did not return a call to GlobeSt.com in time for publication. Allied Capital declined to comment beyond its press release.

Allied Capital’s "unconditional guaranty of the obligations outstanding under Ciena's revolving credit facility may become due," it said in the release. The company intends to pay approximately $320 million to the lenders in connection with Ciena's revolving credit facility and will continue to guarantee a remaining balance of approximately $10 million. To fund the payment, Allied Capital will tap some $150 million it has in cash and may borrow an additional $170 million on its unsecured revolving line of credit. In essence, Allied Capital will become a senior secured lender to Ciena. . . . more