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AMD to issue $2.2 billion USD in Convertible Senior Notes

AMD is a company that has been strapped for cash lately. In late April, the Sunnyvale, CA based company announced that it would offer Convertible Senior Notes to raise around $2.2 billion USD. AMD set a conversion point of $42.12 USD per share at a time when its stock price was $14 USD.

The company's efforts to raise more cash have intensified even further. Yesterday, AMD priced an additional $1.5 billion USD in Convertible Senior Notes at a conversion point of $20.13 USD per share. The conversion price represents a 50 percent premium over AMD's $13.42 USD stock price at close of day on August 8.

AMD plans to use the funds received from the offering to pay an outstanding balance on a loan from Morgan Stanley Senior Funding in late 2006. The company borrowed around $2.5 billion USD in loans and $1.2 billion USD in common stock to fund the $5.4 billion purchase of ATI Technologies. The company also reported a net loss of $600 million USD last quarter while archrival Intel reported net income of $1.3 billion USD.





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Sold, or will sell?
By Kuroyama on 8/10/2007 9:58:39 AM , Rating: 2
Is this an announcement that AMD sold the bonds, or that they plan to sell them? I read the article but don't understand the phrasing. The stock price drops in recent days has been due in part to a significant decrease in the ability of companies to borrow cheaply, so I'd be surprised if AMD did in fact successfully issue these bonds just now. And 5.75% interest seems quite low for a heavily indebted company like AMD, considering that my risk free FDIC insured bank account earns 5.3%.




RE: Sold, or will sell?
By mdogs444 on 8/10/2007 10:07:41 AM , Rating: 3
It means they are planning to sell more "bonds" of sorts. They will sell more and promise payouts of much larger sums than the bonds sold for. Only reason they do this is because the interest rate and fees paying late on the loans is probably more than what they will pay back on the bonds themselves.


RE: Sold, or will sell?
By 16nm on 8/10/07, Rating: -1
RE: Sold, or will sell?
By bobdelt on 8/10/2007 12:54:06 PM , Rating: 2
It's called investing for a reason. Almost every company finances their businesses with debt, and the ones that don't probably should or have way too much cash on hand and should issue a special dividend (like what palm is doing).


RE: Sold, or will sell?
By 16nm on 8/10/07, Rating: -1
RE: Sold, or will sell?
By BikeDude on 8/10/2007 9:05:08 PM , Rating: 1
I think AMD made the right move. I hate motherboards with integrated graphics, but... For business use, they make a lot of sense. A high percentage of PCs sold do not need the latest GPU.

And there might be some performance benefits from integrating the GPU.

Laptops might be able to squeeze out more performance while reducing power consumption.

etc... etc...

For most gamers, the concept of an integrated GPU is (for now) a dead end.

Besides, Intel have been talking about similar designs for quite a while. AMD need something to match or surpass them.


RE: Sold, or will sell?
By wordsworm on 8/11/2007 11:53:04 AM , Rating: 2
I read somewhere that Nvidia is working on getting integrated graphics to work with their cards as physics processors. If that works out, and AMD comes up with something similar, the onboard graphics could become an important part of the package.


RE: Sold, or will sell?
By 16nm on 8/12/2007 3:17:08 PM , Rating: 2
Why? How does ATI help AMD create CPU/GPU processors? AMD should have hired a few top engineers from ATI for their Fusion, not undertaken a multibillion $ acquisition that is mostly unrelated.

Oh, don't get me wrong, I don't think Fusion is a bad idea at all. I just think that it is not as important as AMD think it is. ATI cost TOOOO much and they don't even have anything related to this concept already in the works. I don't think ATI brought anything to the table with regard to this. AMD should have done it on their own like Intel are doing, OR bought a company that is already moving in this direction (fusing CPU and GPU) if one even exists! Now, the ATI guys are in the toilet when they were a reasonably healthy company at the time of acquisition. Look at the market share Nvidia keep gaining. When will this come to an end? ANd AMD are just as f'ed up for wasting so much d@mn money. The CEO and CFO should be in some very deep poo-poo if you ask me. Their heads should be rolling. In my opinion, they were only concerned with becoming a large chip manufacturer to massage their egos all else be damned.

I have a feeling Intel are going to absolutely dominate the whole idea of the CPU/GPU processor. AMD are royally screwed. Intel tripped up and gave AMD an excellent opportunity. AMD took very little to no advantage of it, and a couple years later, everything is a mess. Proof: http://breakfree.amd.com/ Now that's desperation.


RE: Sold, or will sell?
By vignyan on 8/11/2007 6:49:47 AM , Rating: 3
Dude... me being an Intel supporter think that AMD has gone in the right direction... Probably i am nuts ;) but if you think in a bigger scale, the concept of SOC has been in the market for quite some time now. Now since intel had planned for that, AMD needs to gear up for that... Imagine that in 2009, intel comes out with a CPU+G+IMC on same package and ICH off chip (in sense of platformization), and AMD still produces (probably better) but only chipset, then its gonna be a BIG trouble for them in terms of competition. The Intel based systems in that scenario will be superior in almost all aspects as compared to any main-stream solution AMD and partners announce...

I think its good for AMD that they took ATI.. but for 5.4bn, ya... they seem to have paid a bit more than 1-1.5bn extra for the aquisition. Plus ATI has a record of not sticing to the dead lines consistantly ;)... Which is a perfect match for AMD... keeping up the reputation.. ;)


RE: Sold, or will sell?
By ebakke on 8/10/2007 1:26:25 PM , Rating: 2
I hope you hold some entry-level job, and never get into to any kind of management. That is, unless you go to school and learn how a business actually works.


RE: Sold, or will sell?
By spluurfg on 8/10/2007 10:10:25 AM , Rating: 2
Well, the FDIC insures you only to $100,000... so for corporations wishing to tuck millions away, this generally isn't an option for them =P

Basically the purpose of this note is simply to convert AMD's debt into equity, reflecting the recent spike in the cost of taking loans. To the buyer, it functions like a regular bond, except instead of cash, you get AMD stock at the maturation date.

I'm a bit scared by their pricing though... they're selling it at $1,000, and at the maturation date you'll get 50 shares... if the stock doesn't move from its current price of $13 and change, you'll end up with $666, which discounted today is worth $515, with a 5.25% risk free rate. In the end, including the coupons, you'd only get a 3.5% yield...

IE you get 5.75% interest, but the stock is going to have to go up in value to $20 if you want to get a 5.75% profit at the end.


RE: Sold, or will sell?
By adammthompson on 8/10/2007 12:13:45 PM , Rating: 5
"Basically the purpose of this note is simply to convert AMD's debt into equity, reflecting the recent spike in the cost of taking loans. To the buyer, it functions like a regular bond, except instead of cash, you get AMD stock at the maturation date."

No,this is incorrect. Convertible notes can be converted into stock. The noteholder would want to do this if the price of AMD stock goes above the conversion point. Otherwise, noteholders just get their principle back in cash.

The point of convertible notes is that they give the noteholder the possibility of making more money by converting the note into stock if the stock price goes up by a prescribed amount. Because convertible notes have this benefit for the noteholder, they have a lower interest rate. AMD benefits from the lower interest rate, but runs the risk of having to issue more equity. But there's only a chance that AMD will have to issue more equity. If AMD definitely wanted to convert its debt to equity, it would just issue more stock and pay off the debt.


RE: Sold, or will sell?
By spluurfg on 8/10/2007 12:59:18 PM , Rating: 3
Ah, I stand corrected -- I didn't know about the option to take cash at face value.


RE: Sold, or will sell?
By mmarq on 8/10/2007 5:15:31 PM , Rating: 2
But they threaten to go private!

They must be terrible sure that their stock is being undervalued... which is not surprising!...

So cut off the speculative element, and launch the notes seems to be a very 'smart' move. Everyone 'could' win 'except' the pure speculative element.

I think is sensible and not deserving censure if i say that
i stay away of stock markets like the plague. If only ALL companys playout their equity plans in this fashion, i would be in the 'paper' business without ever entering the confusion and speculative redden stock markets.

Adds to that that central governments only issue bonds, and central banks accept them.

If governments were to issue something like stock shares on a centralized institution holding all their vast possessions, i doubt the central banks would be so egger.


RE: Sold, or will sell?
By crystal clear on 8/11/2007 2:28:27 AM , Rating: 2
quote:
But they threaten to go private!


Yes- A Buy Out is inevitable with a massive cash infusion-Good for AMD & we the buyers/users.


RE: Sold, or will sell?
By mmarq on 8/11/2007 5:37:59 PM , Rating: 2
quote:
...A Buy Out is inevitable with a massive cash infusion-Good for AMD...


No. A buy out 'maybe' inevitable WITHOUT A VERY GOOD CASH INFUSION. The point is, if they have at least 1/3 of the very loyal, absolutely devoted no matter what, enthusiastic user base of Intel, as we can see from this forum, than they are safe.

If they don't, than no matter how superior or not their Barcelonas will be from the Cores, how pro-active the enthusiast user base is in seeking and seeing manipulated benchmarks favoring particular SSE implementations or other things...

..."wonder why there inst all encompassing, real good *applications centered* Linux benchamrks outside SPEC org, where anyone can see the source code and track dirty compiler tricks. Benchmarks should all be source available and compiler settings tracked"...

... they are downfall.

That is, i believe, one of the things they are betting with this notes deal.


RE: Sold, or will sell?
By crystal clear on 8/12/2007 5:40:19 AM , Rating: 2
I think 1Q 08 will show if I am correct or wrong on this.

Anyway nice exchanging opinions-you certainly have a good grip on your basics.


RE: Sold, or will sell?
By mmarq on 8/10/2007 1:56:58 PM , Rating: 2
quote:
Is this an announcement that AMD sold the bonds, or that they plan to sell them? I read the article but don't understand the phrasing.


Those are not stock. Those are notes. They are convertible to stock after a period of maturity, and it could be a very good deal, even more because AMD pay interest on those notes...

The conversion parity seems to be a little high now, but the market is extremely volatile..., it could mean a good profit to investors in any case, because those notes are redeemable at the fixed points.

" believe me, because of all that interest or dividend upon those notes (6 to 6 months), IT IS AN INCREDIBLE SAVE INVESTMENT CONSIDERING PRESENT MARKET STATUS, maybe not as lucrative as the ' risky ' speculative 'buy-to-sell' of stock, but could be very lucrative anyway."

So AMD pay interest just like bonds, though those notes are not bonds, they are not going to the open market... that is, you have to subscribe, and AMD has to accept.

It seems to me that the financial market interests want to kill AMD. Look how 'they' depreciated AMD credit rating just after announcements of getting rid of debt and of a superior product(K10): http://www.forbes.com/markets/feeds/afx/2007/08/10...

So AMD is playing to raise their liquidity(cash) and lower their debts, in a very lawful way, that could be lucrative to investors to.

If i had enough money available now i would buy those notes. period. Not because of fanboyism or something like that, but because of the good deal.

And it could be even more safe and lucrative, because investors are not dependent of market weasels , but they themselfs can force the hand if they buy AMD products and campaign to 'close friends and relatives' to buy them to. When the notes mature they could reap a god profit on top of the interest payed...

... yes it could be considered like fanboyism, but its only investment protection anyway... everybody wanna and should be doing exactly that with every 'paper'... if it weren't for the selfish interests of the speculative market.

And that is why AMD came up with this 'notes' deal... almost like in a private fashion( to cut off the speculative element and put some power in the hands of investors).

Ok its not 100% infallible, mean profit absolutely guarantied, but considering the volatility and speculation on open markets its far far more save... and if anyone can point to a deal that is 100% guarantied, them (s)he could start insulting me right now...

( though i wont bother answering, because i'm not advocating pro AMD, only the deal, because i would recomend anyone a similar deal with Intel instead of stock in the open market. )


RE: Sold, or will sell?
By Orthogonal on 8/10/2007 4:25:31 PM , Rating: 2
Hector Ruiz? When did you get an account and start posting on DT.


RE: Sold, or will sell?
By mmarq on 8/10/2007 5:52:51 PM , Rating: 2
Hello Paul!

... the same day when 'one' has heard that Paul Ottelini had did it... only to find out that ' one's buddy ' was already there a long time ago with his congregation!


RE: Sold, or will sell?
By mmarq on 8/10/2007 6:23:46 PM , Rating: 2
How rude of me...

I forgot to clearly elucidate my friend;

http://www.globalresearch.ca/index.php?context=va&...

Stock market ?...


RE: Sold, or will sell?
By Ringold on 8/12/2007 4:18:18 PM , Rating: 2
After a massive bull market stretch back years, with the indexes still positive for the year, and you refer to it as a bloodbath?

Even the big-name commonly held mutual funds are still up huge for the year.

Not to mention long term average annual gains of around 10%.

Sorry, but any view other than long term market participation is way, way out of the mainstream. Not my fault if you bought a bunch of home builders, REITs or mortgage companies earlier this year ;)


RE: Sold, or will sell?
By crystal clear on 8/11/2007 2:43:08 AM , Rating: 2
These loans and notes and ratings makes AMD's accounts an absolute minefield.

S&P + Moodys both are giving negative ratings !

They are neither BIASED or DUMB IDIOTS.


RE: Sold, or will sell?
By mmarq on 8/11/2007 5:07:53 PM , Rating: 2
quote:
They are neither BIASED or DUMB IDIOTS.


Of course not. But they are the 'ones' being excluded somehow from this deal... what do you think they'll vote for ?

And this is the point i'm so glad about this deal, and not in here for sterile 'fanboyism' discussions. Finally some company has realized they don't need the S&P + Moodys of this world upon a crises!... absolutely great!


RE: Sold, or will sell?
By Aerius on 8/13/2007 6:32:30 PM , Rating: 2
I can’t tell if this is a joke post or one by some random kid who does not understand capital markets. Basically your post has too many errors to correct, but to hit a couple highlights:

1) According to your link, S&P raised the rating of unsecured debt, not lowered – so put away the tin foil hat; the outlook has was, and still is, negative.

2) On what grounds is it not ‘risky’? I think a company who blows through hundreds of millions of dollars and is running out of cash pretty risky. In case you didn’t know, if they go bankrupt you don’t make money. If they were a corp in tip top condition they wouldn’t have to make the notes convertible to get a decent yield.

3) The conversion price is at $42 (!!), AMD has closed that high a couple days ever. If you are that confident that you will be able to exercise at anything that high, just buy the stock – more upside. Your ‘get your fiends and family’ to buy comment cracked me up – you sure you aren’t some delusional fanboy? You think you can affect their bottom line in a material way?

4) If you want a 100% infallible investment consider TIPS, or some other kind treasury investment that is guaranteed by the government. Sure you won’t be getting 5.75%, but you will be getting something very close to that. Also note that the notes are unsecured, so who knows how much you would get in the case of some sort of liquidation or chapter 11 filing.

The offer is probably ‘fair’ as there are no free lunches and markets are reasonably efficient. There is some upside but also significant risk; to talk about it as if it was the deal of the century is rather comical.


RE: Sold, or will sell?
By crystal clear on 8/11/2007 1:00:42 AM , Rating: 2
Read this-Its all very clear & precise.

http://www.amd.com/us-en/Corporate/VirtualPressRoo...


RE: Sold, or will sell?
By crystal clear on 8/12/2007 5:47:25 AM , Rating: 2
This from the press release-

AMD expects to grant to the initial purchaser a 30-day option to purchase up to $225 million aggregate principal amount of additional notes to cover over allotments.


Which means-

AMD will give the initial purchaser a 30-day option to buy up to an additional $225m worth of notes, which could bring the sum raised to $1.725bn.


RE: Sold, or will sell?
By octop8 on 8/12/2007 2:08:20 AM , Rating: 3
The articles says the bonds have been "priced". This means the deal is done. Institutions have bought and just awaiting settlement.


AMD gets a knew oan to pay for an old loan..
By DallasTexas on 8/10/2007 10:43:32 AM , Rating: 1
"..AMD plans to use the funds received from the offering to pay an outstanding balance on a loan .."

What a mess. I do like AMD's strategy of defocussing on processor performance because, well, their processors to do not measure up. Their strategy of undermining Intel's brand with their paid "monopoly analysis" is also clever, although pathetic. I guess only time will tell how the chapter ends. I predict Samsung will buy AMD's technology and actually give Intel some competition.




RE: AMD gets a knew oan to pay for an old loan..
By FITCamaro on 8/10/2007 10:53:53 AM , Rating: 2
Yes...because AMD isn't focusing on processors any more. And realistically, Intel past business practices have hurt AMD. You can try to deny they did it, but they already have the evidence.

Yes AMD might only be pushing it because they're not doing so hot due to the late introduction of Barcelona and the constant Intel price cuts, but do you think Intel would do any different?


RE: AMD gets a knew oan to pay for an old loan..
By melgross on 8/10/2007 11:59:29 AM , Rating: 2
This has become a very tiring argument.

Even if that were the main cause of AMD's woe's over the years, rather than the more likely reason, that being their own overwhelming incompetence throughout most of the company's lifetime, it isn't an excuse now.

While Intel was floundering through the last stages of the 90nm Netburst struggle, AMD had its day. They managed to build their business (and finally, profits!) over Intel's problems. Now that Intel has overcome those, to again move ahead in performance by a good deal, AMD is back in the number two spot for most of its product line. With AMD also making poor decisions as how to allocate their product line, they have sustained major losses.

With questions about the long term viability over the ATI acquisition, and the huge debt it engendered, AMD's current problems are its own responsibility.

To blame any long term business failures of AMD, on possible, as yet unproved, misadventures of Intel, has no bearing on AMD's current precarious position.

That can be blamed on AMD's always dysfunctional leadership.

The problems they are now suffering with Barcelona, are typical of their historical difficulties. Promise much, have major process difficulties, deliver late, watch Intel move ahead, offer chips at discount prices.

None of this can be laid at Intel's feet. It is solely the fault of AMD.


RE: AMD gets a knew oan to pay for an old loan..
By mmarq on 8/10/2007 3:25:30 PM , Rating: 2
quote:
This has become a very tiring argument.


indeed!...

But its incredible how they managed to raise from almost nothing to close to 30% of the market, when everybody else failed(centaur, cyrix, PowerInitiative(that Apple ditched...)...

It can only mean that AMD had and still has very competitive products, and is resisting heroically where so many would have dropped out long time ago, because it has its advantages, a top of class design team, and a clear advantage in the 'very costly' fab SOI process.( k10 IS superior to Conroe, and is going to surprise many when it gets beyond 3.0Ghz... i'm willing to bet real money on that!).

Advantage because IBM/AMD (not only AMD!) process is clearly superior to the bulk process of Intel to the point of the SOI DSL without hi-k/metal of IBM/AMD at 65nm, is superior to Intel bulk hi-k/metal at 45nm, otherwise how could IBM manage to get ~5,0Ghz in a 17 stage pipeline DP chip with ~340mm2 at 65nm (>3x size of DP Penryn(107mm2) when Intel is claiming 3,3Ghz and launch top at 3,16Ghz 120W TDP!??...
http://www.digit-life.com/articles/ibmpower4/
http://www.realworldtech.com/page.cfm?ArticleID=RW...

Imagine when IBM/AMD process gets to the 45 nm hi-k/metal process by the end of 2008 :-O !. So as conclusion, and in the same line of though of many, i would clearly buy a Power 6 only if only they could be somehow affordable and for a PC like configuration( and i would really; Power 6 + Linux).

But no!... people forget the reality and only see things like in a lose or win game, where their adversary/enemy (AMD) has to be defeated at all cost no matter what... even if in the end that victory will represent a clear defeat for the 'mass' of supporters!... Freud would be delighted!..

Of course AMD has made mistakes, so has Intel and everybody else, but remember that the maneuvering space is much much more tight for AMD... meaning they have to make much more tradeoffs than Intel.

In the end the only 'sane' option is that competition should happen much much more often . I can still remember when Intel owned almost 90% of the market. 'FANS' should appreciate the competition, for their own sake... but instead there is this irrational emotive impulse, like all there is, is nothing more than a football or soccer game.


By crystal clear on 8/11/2007 12:56:14 AM , Rating: 2
quote:
Advantage because IBM/AMD (not only AMD!) process is clearly superior to the bulk process of Intel to the point of the SOI DSL without hi-k/metal of IBM/AMD at 65nm, is superior to Intel bulk hi-k/metal at 45nm, otherwise how could IBM manage to get ~5,0Ghz in a 17 stage pipeline DP chip with ~340mm2 at 65nm (>3x size of DP Penryn(107mm2) when Intel is claiming 3,3Ghz and launch top at 3,16Ghz 120W TDP!??...


I am neither an Intel/AMS fanboy.I past that stage longtime ago.

I buy the best products in the market at the best prices(for me).

I see & decide on whats offered in the market for sale.

Right now & for the near future-only Intel & IBM have product offerings that meet consumer expectations/demands.

AMD has only "roadmaps/slides/claims(with no supporting benchmarks) to offer .

I dont buy roadmaps-I/we buy REAL products that work & meet their expectations & our requirements.

My message to AMD-

Get your products out into the market- then talk about them. -thats what IBM does- talk less work more.

Talk on what you have achieved & NOT on what you plan to achieve.

The buyers want REAL products & NOT PLANS !

Real products bring in revenue for Intel/IBM .

AMD announcements dont bring anything of value.


RE: AMD gets a knew oan to pay for an old loan..
By mmarq on 8/11/2007 8:01:35 PM , Rating: 2
quote:
Get your products out into the market- then talk about them. -thats what IBM does- talk less work more.


Funny you say that!

IBM generally has taken 3-4 years to enter with a new processor, and they talk about them generally more than 1 year before market. Much different from the mainstream of 1-2 years of Intel and somehow AMD. AMD is late, definitely without doubt, with Barcelona for many reasons i believe, being the principal because K10 is 283mm2 where Conroe is 143mm2 at the 65nm process, and a 2 way MCM is definitely much more easy and fast to produce.

I Believe the real Barcelona as they intentioned in the first place, is going to be Shangai(6MB L3 cache + other things), because a 4 core with only 4MB L2/L3 cache when a Intel Quad has 8Mb seems definitely very low.

And that would have given a substantially superior K10 to what K10 is going to be now, and 'most probably' to current Core designs also. And i say that because is or should be very natural and logic and wealthy for the market and users to, for Intel and AMD to leapfrog each other upon interleaved consecutive upgrades.

But that would had putted K10 very well above 300mm2 at 65nm, without price market for the desktop, yielding too low also for it to have market against a 286mm2 core Quad, and worst if a DP ended up too week to take on a Quad on the server side(which seems very logic).

So they had most probably to had a roll back, a lot of tradeoffs had to be decided when hurry is a very logic enemy of efficiency, and with ATI acquisition and Fusion plans, a mess was installed.

That is i believe, a very plausible explanation. But i'm not advocating AMD. I've bought more AMD in recent years, mostly because i believe their HTT platform is much superior, and CPUs obsolesce 2-2 years to an almost worthless state anyway . But i've bought Intel before ( PII and P4), i can surely do it again. Only i want a competitive market for having better product at lower prices.


By crystal clear on 8/12/2007 6:35:30 AM , Rating: 2
"IBM generally has taken 3-4 years to enter with a new processor,"

IBM can afford this luxury-AMD cannot !

AMD is in such a desperate position that one bad move could spell them disaster.No place for mistakes !

Who is to be blamed for this-certainly not Intel,but the
(I emphasize this) "management of AMD".

R&D & manufacturing of AMD is the best available around-but the management is the worst available.

"So they had most probably to had a roll back, a lot of tradeoffs had to be decided when hurry is a very logic enemy of efficiency, and with ATI acquisition and Fusion plans, a mess was installed."


Again who is to be blamed-

R&D NO - Management YES

Management FAILURE is AMDs FAILURE-

Not the product ,not the R&D,not the manufacturing.


RE: AMD gets a knew oan to pay for an old loan..
By mmarq on 8/10/2007 4:45:54 PM , Rating: 2
quote:
With questions about the long term viability over the ATI acquisition, and the huge debt it engendered, AMD's current problems are its own responsibility.

To blame any long term business failures of AMD, on possible, as yet unproved, misadventures of Intel, has no bearing on AMD's current precarious position.


Of course its their responsibility. ATI was a risky plan as it appears, but if Fusion,Torrenza and CTM play out good... they may end up with much reasons to celebrate.

But 'possible' misadventures of Intel had nothing to do with ATI. And i say 'possible' because a verdict has not yet been reached. Its needed caution and decency. Fact that is fact is that 'evidences' has made the EU Commission to step in. Nevertheless caution is to be applyed.

But what if Intel lose in the courts and AMD is right in all their rantings ?

No end of the world... see my other reply to you above.


By crystal clear on 8/11/2007 12:17:32 AM , Rating: 2
quote:
but if Fusion,Torrenza and CTM play out good... they may end up with much reasons to celebrate.


The catch word "IF" & what happens when it turns into

"IF NOT"-they may end up into bankcruptcy & much reason for us to regret-No competition-No price cuts !

All your arguments depends on the "IF" factor.


By mmarq on 8/11/2007 8:29:14 PM , Rating: 2
And "IF NOT" is what ?

When CPUs had obsoleted from 2-2 years to an almost worthless state, for many from now, how much does 'precisely now' worth ?


By MrBungle123 on 8/10/2007 12:09:32 PM , Rating: 2
They could have fooled me, the only "product" they have released this year has been price cuts, and more graphs showing how their processors would perform if they could release them. But thats okay since they will soon go to market with an Athlon X2 clocked an incredible 200MHz faster than last years fastest model.... yeah that would be impressive if it were still 1998. What it looks like to me is that AMD is having problems because they were sitting on the their hands when the A64 was king.


By JonnyDough on 8/11/2007 7:10:44 AM , Rating: 1
AMD isn't focused on processors anymore? I'm sure that little things called 'division of labor' and 'specialization' allows them to be VERY focused on processors, as well as everything else like chipsets and graphics cards. Don't go thinking for a second that AMD has to remain focused on a single product line as it's core competency. Computer electronics is what they're marketing, and they're visionaries that are willing to go into massive debt in order to try and gain market share. Stocks and cash flow aren't everything. Sometimes obtaining the right tool (ATI) is the best way to get a jump on a competitor. AMD thought they saw that, and the poker game isn't over yet. They may be a lot smaller than Intel, but they're still an enormous company that is capable of multi-tasking. Your comment goes to show that you're a speculator and lack valid knowledge with which to back your opinions, just like so many others.


RE: AMD gets a knew oan to pay for an old loan..
By spluurfg on 8/10/2007 11:48:27 AM , Rating: 1
At the time of maturity, all of the notes will convert into shares, and AMD will have converted their old loan into equity. Since debt has become more expensive, this should make sense...


By crystal clear on 8/11/2007 12:03:29 AM , Rating: 2
AMD has as in the previous offering entered into capped call transactions in connection with the offering, a move intended to reduce the potential dilution to common stockholders if the notes are converted into shares.

Shareholders are not fools-they know how to protect their interests.

AMD management is well aware of that, shareholders could send them off to retirement-

Pension Road Maps !.


This hurts regular AMD stockholders
By LTG on 8/10/2007 10:46:05 AM , Rating: 2
What they don't advertise too heavily is that "Senior Notes" means this debt takes priority over all normal share holders.

For example if I have 1000 AMD shares, and they can't pay their bills, all of my shares can become worth *ZERO* while people with these notes could still not lose their money.

So that's one of the reasons some people will buy these, as it puts them ahead of the line, compared to all regular shareholders.




RE: This hurts regular AMD stockholders
By adammthompson on 8/10/2007 12:20:45 PM , Rating: 3
"What they don't advertise too heavily is that "Senior Notes" means this debt takes priority over all normal share holders."

Actually, "senior notes" means that it takes priority over other debt (subordinated notes). Even subordinated notes take priority over stock. Stockholders are pretty much at the end of the line in the case of bankruptcy.

Once convertible notes have been converted to stock, however, they're just as risky as stock (because they are stock).


RE: This hurts regular AMD stockholders
By LTG on 8/10/2007 1:44:30 PM , Rating: 2
Still hurts shareholders either way.

These notes take priority over shareholders, and even if they convert to regular stock they still will dilute shareholders.

So no matter what the details, this is something you don't want to happen if you own the stock (unless it's a last resort which it seems like this is).


RE: This hurts regular AMD stockholders
By crystal clear on 8/11/2007 1:05:58 AM , Rating: 2
AMD has as in the previous offering entered into capped call transactions in connection with the offering, a move intended to reduce the potential dilution to common stockholders if the notes are converted into shares.

Shareholders are not fools-they know how to protect their interests.

AMD management is well aware of that, shareholders could send them off to retirement-

Pension Road Maps !.


RE: This hurts regular AMD stockholders
By LTG on 8/12/2007 1:16:46 AM , Rating: 2
quote:
AMD has as in the previous offering entered into capped call transactions a move to reduce dilution to stockholders...

Shareholders are not fools-they know how to protect their interests.


But now this means AMD had to pay even more "interest" to borrow this money by buying the call options, so the cash keeps a draining...

I would say you could make an argument that only "fools" would buy the stock now.

But look on the bright side, Barcelona could launch at 2.2Ghz instead of 2.0Ghz - maybe that will help them.


By crystal clear on 8/12/2007 6:44:26 AM , Rating: 2
"But look on the bright side, Barcelona could launch at 2.2Ghz instead of 2.0Ghz - maybe that will help them".

YES indeed-only for us the buyers & not the company.

Again the price & performance factor comes into play.

Hope the products do well in the market.


By B on 8/10/2007 5:15:22 PM , Rating: 2
Regarding them being senior notes to the detriment of shareholders: equity is always a more risky asset class than debt. The bond holders will get a fixed interest payment no matter how successful the company is (for simplfication I disregarded the fact these are convertible). The shareholders will get to participate in the upside and growth of the company. Also, the shareholders are the owners and it is logical that they repay their debts before themselves.

Regarding the conversion of debt to equity being a dilutative transaction: the conversion would only dilute current earnings, not assets. The conversion is simply reclassifying debt to equity in lieu of reducing both an asset and a liability by the repayment of said debt.


Personal Bias or criterious rating ?
By mmarq on 8/10/2007 4:22:41 PM , Rating: 2
I'm new to this site.

Can anyone point to some written document where the rating criteria is explained... or there isn't one !?

Its only the arbitrary will of the moderator ?

( i hope 'he' will let pass this one, because i would like the info very much )




RE: Personal Bias or criterious rating ?
By PrinceGaz on 8/11/2007 9:37:24 AM , Rating: 2
The rating always starts at 2, and is increased by 1 (up to a maximum of 5) when some clicks on 'Worth reading', and is reduced by 1 (down to a minimum of -1) when some clicks 'Not worth reading'.

If you post a comment yourself, you are no longer allowed to rate any comments on that article, and any ratings you made before posting the comment are no longer counted.

A special case is that a moderator can raise the rating up to 6, instead of the normal maximum of 5.


By mmarq on 8/11/2007 9:16:24 PM , Rating: 2
quote:
The rating always starts at 2, and is increased by 1 (up to a maximum of 5) when some clicks on 'Worth reading', and is reduced by 1 (down to a minimum of -1) when some clicks 'Not worth reading'.


Not that i intend to go around censoring others, because i believe that only hearing oneself 'echo', dosen't make you more wise.

Nevertheless where are those 'Worth reading' and 'Not worth reading' buttons ?... is the threshold box ?... i putted 5 on your post, "change", refresh page, and nothing happened !?...


By mmarq on 8/12/2007 2:01:53 PM , Rating: 2
quote:
If you post a comment yourself, you are no longer allowed to rate any comments on that article, and any ratings you made before posting the comment are no longer counted.


I've been around the forum, which is not usual for any forum i'm in... and yes i've got it now. Thank you.


Moodys assestments on AMD.
By crystal clear on 8/11/2007 2:09:45 AM , Rating: 2
Something interesting-

Moody's Investors Service announced that it was going to CHANGE the ratings of AMD's 2012 credit notes. The rating went from Ba2 to B2, a change which reflects, according to the firm's long-winded ratings system, a move from 'speculative elements' within the credit to being 'considered speculative' and 'high credit risk' .

Moody's said that the 2012 notes were looking rather less promising after AMD released some of the collateral that was held against the notes, hence the increased speculation about exactly where the money to generate returns on the notes was going to come from.

Caris and Company kickstarted their coverage of AMD by suggesting that holders of AMD stock start selling it off, with a target price of $10. That's a bad price for the stock, and really isn't the message that AMD is trying to hit the market with, as it battles to get its stock price up towards the $40 required to service the various loans it took out to buy AMD and bail itself out of this year's financial hole.



http://www.theinquirer.net/default.aspx?article=41...

By the way -

The Inquirer mix up-

"the various loans it took out to buy AMD and bail itself out of this year's financial hole."

Should be ATI !




RE: Moodys assestments on AMD.
By mmarq on 8/11/2007 11:03:22 PM , Rating: 2
After the mess they 'arranged' for the USA public, they shoudn't be allowed to rate anything.

http://www.globalresearch.ca/index.php?context=va&...
http://www.globalresearch.ca/index.php?context=va&...
http://www.globalresearch.ca/index.php?context=va&...

In face of the exposed, including the dollar trouble, i think AMD had thought about offering the notes in EU space. Only there(here!) the financial markets are not unified(thank god!) and laws are too disparate to make it effective(thank god again!).

But the central point is that when you take a debt, and you are not able to repay, it generally means your property is taken away from you. Rating is only necessary when you pretend more than your property value( a modern CPU fab worths ~2,5 Billion each)

But when you take an 'easy' debt by credit expansion, facilitated by all those rating and lending speculative firms, and end up trapped in the consequent speculative bubbles controlled by speculative instruments like the stock markets, like happening in the Real State bubble in the USA with millions of foreclosures, it means you are being ripped off INTENTIONALLY !

Why on earth would AMD take another cash originated debt, for easy expanding of stock count, increasing the asset value, but decreasing the corresponding real property value of each share(speculate), than be trapped at the hands of all those S&S and Moody's, and end up ripped off ?

For AMD it means that they are risking not only their income but also their property in case of bankruptcy...

...BUT IT DEPENDS MOSTLY ON THEM AND THEIR COMPETENCE, AND NOT ON SPECULATIVE ELEMENTS...

...it is for AMD more serious than straight stock emission, but it could be much more safe without speculative elements.

Of course anyone that owns its own business and bets on their capabilitys, and are not dependent on dirty monopolistic tricks or speculative tricks to do their jobs, have my absolute respect.

Those rating firms, simply don't have the morality, the competence, and what they say should not be taken in consideration... they always whine and downgrade if they are cut off in their speculative games...

Unless of course for all those, that are willing to bet on their speculative games for high profits, and bet to lose their homes, their businesses and their freedom. Then Moodys and others similar assessments are like god word!!??...


By crystal clear on 8/12/2007 7:25:03 AM , Rating: 2
"BUT IT DEPENDS MOSTLY ON THEM AND THEIR COMPETENCE, AND NOT ON SPECULATIVE ELEMENTS..."

"Those rating firms, simply don't have the morality, the competence, and what they say should not be taken in consideration... they always whine and downgrade if they are cut off in their speculative games..."



Yes you are right but unfortunately AMD has to operate in a business envoirement such as the USA-you got to adapt to these conditions,like it or not-take it or leave it.


i like amd
By ds4 on 8/11/2007 10:08:38 AM , Rating: 2
i hope they get the mony.
http://walla.co.il




RE: i like amd
By TomZ on 8/12/2007 11:22:04 PM , Rating: 2
^-- ban me!


By Viditor on 8/10/2007 6:43:28 PM , Rating: 3
AMD isn't really raising more cash...they are actually using the remainder of their cash and this senior note offering for refinancing the rest of the Morgan Stanley 7.35% loan that had several restrictions, with a 5.75% loan. This will save them a significant amount of money and is a net gain!




Crucial information.....
By crystal clear on 8/10/2007 11:42:04 PM , Rating: 3
All those commenting on this subject should take these factors into consideration-

A regulatory filing from last October details conditions under which AMD must pay back the debt early:

--All net proceeds from any new debt

--All cash proceeds from asset sales over $30 million

--All cash proceeds from sales of AMD's stake in its former memory chip unit, Spansion Inc.

--Half of the net proceeds from issuing new shares

--Half of excess cash flow



plus more stringent terms & conditions-read the regulatory filings for more details.




By crystal clear on 8/11/2007 3:44:59 AM , Rating: 3
Its important to note the following-

1) AMD (said-as in the previous issues $2.2 billion)it would enter into capped call transactions in connection with the offering, a move intended to reduce the potential dilution to common stockholders if the notes are converted into shares.


2) In the last issue(2.2bl) S&P said this-

Credit rating agency Standard & Poor's downgraded the company on Monday to "B," its fifth-highest "junk" grade, from "B-plus," with a negative outlook. S&P said the downgrade reflected "recent subpar execution of (AMD's) business plans" and a more difficult market environment
(note this comment very carefully-subpar execution fo AMDs business plans.)

To add more sting to this rating-Read this

Aug 7 - A new study by Standard & Poor's Ratings Services confirms earlier findings that CreditWatch and rating outlooks provide powerful signals of future rating changes The report, titled "CreditWatch And Rating Outlooks Provide Powerful Warning Signals," published earlier today on RatingsDirect, includes the first published analysis of CreditWatch performance for Structured Finance ratings.

In recent years, ratings in this sector have experienced increased volatility, and market participants are more sensitive to potential rating changes. In this more volatile environment, CreditWatch placements have increased significantly, providing credit signals on the near-future movements of Structured Finance ratings.

"Investors and other market participants who try to anticipate rating actions can use these indicators as valuable predictors of ratings behavior," said Standard & Poor's managing director Gail Hessol. CreditWatch listings and rating outlooks add meaningful incremental information to the analysis of credit migrations.

http://www.reuters.com/article/companyNewsAndPR/id...



3) It must fund a capacity expansion plan that will cost it $2 billion this year alone.(Asset lite is not the solution-its a stop gap measure)

4) It also has to buy expensive new production technology to keep up with Intel's upgrades as well as develop new processors to compete with more powerful and efficient ones coming out of its competitor's labs.


5) Revenue is under pressure amid a price war, which is getting bad to worse on AMD until it debuts its new high-end chip called ...........etc
"That is ofcourse if it meets the expectations(hype) built around it by AMD".

"That is ofcourse if it sells enough against the Intel offerings".

All hangs/depends on the word "IF"-NO guarrantees of success.


In short its a very bad business climate (created by AMD itself) to operate in.

You cannot go on for a long time this way-there is a limit on how much you can borrow from the market.




Hey AMD I found money
By christojojo on 8/11/2007 7:42:15 PM , Rating: 3
AMD I think you could ask Rollins for some "spare change". (IF you think you can trust him.) ;)

http://www.dailytech.com/ExDell+CEO+Rollins+to+Rec...




Whatre they thinking?
By Shadowmaster625 on 8/10/2007 4:03:29 PM , Rating: 2
AMD absolutely needed ATI to do its part. So far, ATI has failed to a great degree. If they dont BOTH come up with something that trounces their competition, then I feel sorry for anyone who invests in AMD. The sad thing is I have an X300 in my machine right now, and the damn thing doesn't even properly support DX9.0c




Bad move AMD
By slickr on 8/12/2007 9:18:44 AM , Rating: 2
Bad move from AMD. Instead of investing those 5$ billion in more production fabs or increase in inteligence force they bought in the worst time for them. Even Intel is not so powerful to buy ATI but AMD with it's only 28% market share were determined to buy it. Well here is the result now:
Slow and old products
Problems with production and development
Finance problems
Reduced market share and profits
and should i count more!




Sept 10 ? ? ?
By crystal clear on 8/13/2007 12:49:04 AM , Rating: 2
Some interesting news-

AMD to launch two Barcelona-based processors in September

AMD schedules to launch two 2-way Opteron (Barcelona) server processors on September 10 this year, according to sources at server makers.

The Opteron 2348 and 2350 will have core frequencies of 1.9GHz and 2.0GHz and will be priced at US$320 and US$390 in 1000-unit tray quantities, respectively. In October, AMD will launch the 2.2GHz Opteron 2354 with 95W TDP and a price of US$610 in 1000-unit tray quantities, however this processor should actually appear in the channel later this month, noted the sources.

The Opteron 2300 series will include Opteron 2340, 2350, 2352, 2354, 2356, 2358 and 2360. Models at frequencies higher than 2.0GHz are expected to launch in the fourth quarter, according to an earlier announcement by AMD.

AMD also has plans to introduce the 8-way Opteron 8300 series which will include Opteron 8348, 8350, 8352, 8354 and 8356 models, added the sources.

AMD declined the opportunity to respond to this report, saying it cannot comment on unannounced products.



http://www.digitimes.com/mobos/a20070813PD205.html




"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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