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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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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 modded down, down, down, and the flames went higher." -- Sven Olsen

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