AMD Looks to Raise $2 Billion Through Debt Sale
Advanced Micro Devices (AMD) announced that it would try and raise almost $2 billion in convertible debt to try and bring relief to the company’s cash flow problems. AMD has been locked in a huge battle with Intel which has produced a recent chip price war. The money raised would provides some working capital and help pay off debt it incurred with the purchase of ATI Technologies in October of 2006.
AMD estimates that the net proceeds from the offering will be approximately $1,972 million (or approximately $2,169 million if the initial purchasers exercise their over allotment option in full) after deducting discounts, commissions and estimated offering expenses. AMD intends to use a portion of the net proceeds of the offering to pay the cost of the capped call transaction. If the initial purchasers exercise their option to purchase additional notes, AMD expects to use a portion of the net proceeds from the sale of additional notes to enter into an additional capped call transaction. AMD expects to use at least $500 million of the remaining net proceeds of the offering to repay a portion of the term loan AMD entered into with Morgan Stanley Senior Funding, Inc. to finance a portion of the purchase price of, and expenses related to, the acquisition of ATI Technologies Inc. AMD expects to use any amounts not applied to the repayment of the term loan for general corporate purposes, including working capital and capital expenditures.
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