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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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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.


"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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