Communications network and software company Ciena Corporation said today that it expects to recognise a GAAP loss totaling between $5 and $6 million in the third quarter, relating to commercial paper investments in structured investment vehicles Rhinebridge and former Cheyne Finance. Ciena had previously recognised a $13 million loss related to its investment in these two SIVs, each of which entered into receivership and failed to make payment at maturity during the fourth quarter of Ciena’s fiscal 2007.

At 30 April, Ciena’s commercial paper issued by these SIVs had a carrying value of $25.6 million. The estimated GAAP loss for the third quarter is based upon valuation information provided by Ciena’s investment manager on 16 July in connection with the restructuring of these SIVs. Ciena says this GAAP loss will not affect its income from operations for Q3. Ciena says it believes its SIV-related exposure is limited to these two investments.