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Sounds more like another run of financial difficulties to me.
[Posted by: dudde | Date: 08/10/07 10:40:29 PM]
Advanced Micro Devices today said it would sell another 5.75% of convertible senior notes for about $1.5 billion to refinance a loan it took to acquire ATI Technologies last year. AMD already took a loan using the same method earlier this year to finance its operations.
AMD has announced the pricing of $1.5 billion aggregate principal amount of 5.75% convertible senior notes due 2012 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. AMD granted to the initial purchaser a 30-day option to purchase up to $225 million aggregate principal amount of additional notes to cover over-allotments, if any.
Interest on the notes will be paid semiannually on February 15 and August 15 at a rate of 5.75% per year. The notes will be convertible into shares of common stock based on an initial conversion rate of 49.6771 shares per $1000 principal amount of notes, which is equivalent to an initial conversion price of approximately $20.13 per share. This initial conversion price represents a premium of approximately 50% relative to the last reported sale price on August 8, 2007 of AMD’s common stock of $13.42 per share. Holders of the notes may require AMD to repurchase the notes for cash equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the occurrence of certain designated events.
AMD estimates that the net proceeds from the offering will be approximately $1479 million (or approximately $1,701 million if the initial purchaser exercises its over-allotment option in full) after deducting discounts, commissions and estimated offering expenses.
AMD intends to use the net proceeds of the offering, together with available cash, to repay in full the outstanding balance of the term loan AMD entered into with Morgan Stanley Senior Funding in October 2006. If the initial purchaser exercises its over-allotment option, AMD intends to use the additional net proceeds for general corporate purposes, including working capital and capital expenditures.
