SHORT-TERM AND LONG-TERM DEBT

Term Loan

On July 15, 2014, Ciena entered into a Credit Agreement providing for senior secured term loans in an aggregate principal amount of $250 million (the “Term Loan”) with a maturity date of July 15, 2019. The Term Loan requires Ciena to make installment payments of approximately $0.6 million on a quarterly basis. The principal balance, unamortized discount and net carrying amount of the Term Loan were as follows as of January 31, 2015:



	Principal Balance		Unamortized Discount		Net Carrying Amount
Term Loan Payable due July 15, 2019	$	248,750	$	1,110	$	247,640
	$	248,750	$	1,110	$	247,640

The following table sets forth, in thousands, the carrying value and the estimated fair value of the Term Loan:



	January 31, 2015
	Carrying Value		Fair Value⁽²⁾
Term Loan Payable due July 15, 2019⁽¹⁾	$	247,640	$	247,817
	$	247,640	$	247,817


(1)	Includes unamortized bond discount.


(2)	The Term Loan was categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities.

Outstanding Convertible Notes Payable

The principal balance, unamortized discount and net carrying amount of the liability and equity components of our 4.0% convertible senior notes due December 15, 2020 were as follows as of January 31, 2015:



	Liability Component						Equity Component
	Principal Balance		Unamortized Discount		Net Carrying Amount		Net Carrying Amount
4.0% Convertible Senior Notes due December 15, 2020	$	194,879	$	14,536	$	180,343	$	43,131

The following table sets forth, in thousands, the carrying value and the estimated fair value of Ciena’s outstanding convertible notes:



	January 31, 2015
	Carrying Value		Fair Value⁽²⁾
4.0% Convertible Senior Notes, due March 15, 2015 ⁽¹⁾	$	187,520	$	191,016
0.875% Convertible Senior Notes due June 15, 2017	500,000		495,625
3.75% Convertible Senior Notes due October 15, 2018	350,000		416,063
4.0% Convertible Senior Notes due December 15, 2020 ⁽³⁾	180,343		228,516
	$	1,217,863	$	1,331,220


(1)	Includes unamortized bond premium related to embedded redemption feature.


(2)	The convertible notes were categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its outstanding convertible notes using a market approach based upon observable inputs, such as current market transactions involving comparable securities.


(3)	Includes unamortized discount and accretion of principal.