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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: 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.. ;)

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