Will the exchange of existing notes result in any early redemption penalties or impact cash flow?

Early‑redemption penalties:

The filing describes a private, negotiated exchange of the existing 1.625 % Senior Convertible Notes for new 0.625 % Senior Convertible Notes due 2031, together with a $250 million subscription component. Because the transaction is structured as an exchange/subscription rather than a forced redemption, the company is not exercising any make‑whole or “early‑redemption” clause that would trigger a penalty. In practice, holders agree to swap their higher‑coupon instruments for lower‑coupon securities (and, in some cases, to fund additional purchases), so no call‑premium or accrued‑interest penalty is expected to be levied on the company.

Cash‑flow impact:

The exchange will reduce annual interest expense – the coupon falls from 1.625 % to 0.625 % on the same principal amount – yielding roughly $2.5 million per year of saved cash. The subscription side brings in fresh equity‑linked financing; the $250 million principal is being raised rather than paid out, creating an immediate cash inflow that can be used to shore up the balance sheet, fund capex or refinance other debt. Net effect: a modest improvement in liquidity and a lower cost‑of‑capital profile, with no outflow tied to redemption penalties.

Trading implications:

For traders, the key take‑away is that VIAVI’s financing is clean and cash‑positive. The lower‑cost debt should bolster credit metrics and may tighten the company’s credit spread, supporting the stock’s upside potential. In the short term, expect a modest bullish bias on the equity as investors price in the improved cash‑flow profile, especially if technicals show the stock holding above its 50‑day moving average and near recent support levels. Keep an eye on broader high‑yield market sentiment; any shift in risk appetite could temper the upside, but the fundamental financing relief is unlikely to be a downside catalyst.