SHORT-TERM AND LONG-TERM DEBT

Term Loans

On July 15, 2014, Ciena entered into a Term Loan Credit Agreement (the "Term Loan Credit Agreement") providing for senior secured term loans in an aggregate principal amount of $250 million (the “2019 Term Loan”) with a maturity date of July 15, 2019. The 2019 Term Loan required Ciena to make installment payments of approximately $0.6 million on a quarterly basis.

On April 25, 2016, Ciena entered into an Incremental Joinder and Amendment Agreement (the “Incremental Term Loan Credit Agreement”) that amended the Term Loan Credit Agreement. The Incremental Term Loan Credit Agreement provided for a new tranche of senior secured term loans under the Term Loan Credit Agreement in an aggregate principal amount of $250 million (the “2021 Term Loan”). The 2021 Term Loan required Ciena to make installment payments of approximately $0.6 million on a quarterly basis. At the beginning of the second quarter of fiscal 2017, Ciena refinanced the 2019 Term Loan and the 2021 Term Loan. See Note 22 below.

The net carrying amount of Ciena's term loans were comprised of the following for the fiscal periods indicated (in thousands):



	January 31, 2017		October 31, 2016
Term Loan Payable due July 15, 2019	$	241,635	$	241,359
Term Loan Payable due April 25, 2021	245,158		244,944
	$	486,793	$	486,303

The term loan balances in the table above reflect Ciena's adoption of ASU 2015-03, as described in Note 2 above. Deferred debt issuance costs that were deducted from the carrying amounts of the term loans totaled $4.6 million at January 31, 2017 and $4.9 million at October 31, 2016. Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate method, through the maturity of the term loans. The amortization of deferred debt issuance costs for these term loans are included in interest expense, and was $0.3 million and $0.2 million during the first three months of fiscal 2017 and 2016, respectively. The carrying amounts of the term loans listed above are also net of any unamortized discounts.

The following table sets forth the carrying value and the estimated fair values of Ciena's term loans (in thousands):



	January 31, 2017
	Carrying Value		Fair Value⁽²⁾
Term Loan Payable due July 15, 2019 ⁽¹⁾	$	241,635	$	244,375
Term Loan Payable due April 25, 2021⁽¹⁾	245,158		248,750
	$	486,793	$	493,125


(1)	Includes unamortized bond discount and debt issuance costs.


(2)	Ciena's term loans are categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its term loans using a market approach based upon observable inputs, such as current market transactions involving comparable securities.

Outstanding Convertible Notes Payable

During the first three months of fiscal 2017, Ciena entered into a private transaction to repurchase $46.3 million of the outstanding principal amount of its 0.875% Convertible Senior Notes due June 15, 2017, for an aggregate purchase price of $46.3 million.

The net carrying amount of Ciena's outstanding convertible notes payable was comprised of the following for the fiscal periods indicated (in thousands):



	January 31, 2017		October 31, 2016
0.875% Convertible Senior Notes due June 15, 2017	$	185,122	$	231,240
3.75% Convertible Senior Notes due October 15, 2018	347,939		347,630
4.0% Convertible Senior Notes due December 15, 2020	190,023		188,509
	$	723,084	$	767,379

The convertible notes payable balances in the table above reflects Ciena's adoption of ASU 2015-03, as described in Note 2 above. Deferred debt issuance costs that were deducted from the carrying amounts of the convertible notes payable totaled $3.4 million at January 31, 2017 and $3.9 million at October 31, 2016. Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate method, through the maturity of the convertible notes payable. The amortization of deferred debt issuance costs is included in interest expense, and was $0.5 million and $0.7 million during the first three months of fiscal 2017 and 2016, respectively. The carrying amounts of the convertible notes payable listed above are also net of any unamortized discounts.

The principal balance, unamortized discount, deferred debt issuance costs and net carrying value of the liability and equity components of our 2020 notes were as follows as of January 31, 2017 (in thousands):



	Liability Component									Equity Component
	Principal Balance		Unamortized Discount			Deferred Debt Issuance Costs			Net Carrying Amount	Net Carrying Amount
4.0% Convertible Senior Notes due December 15, 2020	$	202,160	$	(10,954	)	$	(1,183	)	$190,023	$	43,131

The following table sets forth, in thousands, the carrying value and the estimated fair value of Ciena’s outstanding issues of convertible notes as of January 31, 2017:



	January 31, 2017
	Carrying Value ⁽¹⁾		Fair Value⁽²⁾
0.875% Convertible Senior Notes due June 15, 2017	$	185,122	$	184,563
3.75% Convertible Senior Notes due October 15, 2018	347,939		471,188
4.0% Convertible Senior Notes due December 15, 2020	190,023		264,759
	$	723,084	$	920,510


(1)	Includes unamortized discount, accretion of principal and debt issuance costs.


(2)	The convertible notes are 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.