UPDATE 2-Ciena raises bid for some Nortel assets-sources

* Ciena raises offer to $714 million-sources

* Raises cash component to $500 mln, adds debt-sources

* Auction for metro ethernet assets ongoing-sources (Adds analyst comments, details on Ciena bid, byline)

By Anupreeta Das

NEW YORK, Nov 22 (Reuters) - Ciena Corp (CIEN.O: Quote, Profile, Research) has raised its offer for Nortel Networks Corp's optical networking and carrier ethernet business to $714 million, sources familiar with the matter said on Sunday, as the auction for these assets entered its third day.

Ciena's new bid now consists of $500 million in cash and $214 million in convertible notes, the sources said, speaking on condition of anonymity since details of the auction have not been made public.

Last month, the U.S. network equipment maker announced that it had made a stalking-horse offer for these assets of Nortel, the Canada-based telecommunications company that filed for bankruptcy in January and has been auctioning off assets.

The stalking-horse bid set a floor price, but Nortel was free to seek higher offers.

Ciena initially offered $390 million in cash and 10 million shares of Ciena stock, for a total deal value of $522 million, based on the Friday closing price of Ciena stock.