8-KSecurities & Listing

ADVANCED MICRO DEVICES INC 8-K Report, Unregistered Securities Sale (Nov 8, 2004)

Filed November 8, 2004For Securities:AMD

Summary

This 8-K filing from Advanced Micro Devices, Inc. (AMD) on November 8, 2004, reports on an unregistered sale of equity securities. Specifically, AMD has agreed to exchange $60.0 million in aggregate principal amount of its 4.50% Convertible Senior Notes due 2007 for approximately 8.75 million shares of its common stock. This transaction, settled on November 8, 2004, was conducted under the exemption provided by Section 3(a)(9) of the Securities Act of 1933. The primary implication for investors is the reduction of AMD's convertible debt by $60 million in exchange for issuing new equity. This exchange will dilute existing shareholders' ownership, as a significant number of new shares are being issued. While it reduces the company's leverage and potential interest payments on the exchanged notes, investors should assess the impact of this dilution on earnings per share and future capital structure considerations.

Key Highlights

  • 1AMD exchanged $60.0 million of its 4.50% Convertible Senior Notes due 2007.
  • 2The exchange resulted in the issuance of 8,748,612 shares of AMD's Common Stock.
  • 3The transaction was settled on November 8, 2004.
  • 4The issuance of shares was made in reliance on the Section 3(a)(9) exemption from registration under the Securities Act of 1933.
  • 5This action reduces the company's outstanding convertible debt.
  • 6The exchange will lead to an increase in the number of outstanding shares, potentially diluting existing shareholders.
  • 7The Chief Financial Officer, Robert J. Rivet, signed the filing.

Frequently Asked Questions

The primary event reported is Advanced Micro Devices, Inc. (AMD) exchanging $60.0 million of its 4.50% Convertible Senior Notes due 2007 for approximately 8.75 million shares of its common stock.

AMD issued the shares in reliance on the exemption provided under Section 3(a)(9) of the Securities Act of 1933. This exemption generally applies to exchanges of securities between the issuer and its existing security holders where no commission or other remuneration is paid in connection with the exchange.

This exchange reduces AMD's outstanding convertible debt by $60 million and decreases the potential future interest payments associated with those notes. However, it increases the number of outstanding common shares, which could dilute the earnings per share for existing shareholders.

The agreement to exchange was made on November 3, 2004, and the transaction was settled on November 8, 2004.