Short-Term and Long-Term Debt

9 Months Ended

Aug. 01, 2020

SHORT-TERM AND LONG-TERM DEBT

New 2025 Term Loan

On January 23, 2020, Ciena entered into a Refinancing Amendment to Credit Agreement pursuant to which Ciena refinanced the entire outstanding amount of its then existing senior secured term loan with an outstanding aggregate principal amount of $693.0 million as of January 23, 2020 and maturing on September 28, 2025 (the “Old 2025 Term Loan”) and incurred a new senior secured term loan in an aggregate principal amount of $693.0 million and maturing on September 28, 2025 (the “New 2025 Term Loan”).

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


	August 1, 2020										November 2, 2019
	Principal Balance		Unamortized Discount		Deferred Debt Issuance Costs		Net Carrying Value		Net Carrying Value
New 2025 Term Loan	$	689,535	$	(1,659)	$	(3,090)	$	684,786	$	—
Old 2025 Term Loan	$	—	$	—	$	—	$	—	$	687,406

Deferred debt issuance costs that were deducted from the carrying amounts of the term loans totaled $3.1 million at August 1, 2020 and $3.6 million at November 2, 2019. Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the term loans. The amortization of deferred debt issuance costs for these term loans is included in interest expense, and was $0.5 million during the first nine months of each of fiscal 2020 and fiscal 2019. The carrying value of the term loans listed above is also net of any unamortized debt discounts.

As of August 1, 2020, the estimated fair value of the New 2025 Term Loan was $685.2 million. Ciena’s term loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its term loan using a market approach based on observable inputs, such as current market transactions involving comparable securities.