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In this paper we develop a framework for optimizing the performance of the secondary link in terms of the average spectral efficiency assuming quantized channel state information (CSI) of the secondary and the secondary-to-primary interference channels available at the secondary transmitter. We consider the problem under the constraints of maximum average interference power levels at the primary receiver. We develop a sub-optimal computationally efficient iterative algorithm for finding the optimal CSI quantizers as well as the discrete power and rate employed at the cognitive transmitter for each quantized CSI level so as to maximize the average spectral efficiency. We show via analysis and simulations that the proposed algorithm converges for Rayleigh fading channels. Our numerical results give the number of bits required to sufficiently represent the CSI to achieve almost the maximum average spectral efficiency attained using full knowledge of the CSI.