8-KMaterial AgreementsFinancial EventsExhibits & Filings

ADVANCED MICRO DEVICES INC 8-K Report, Material Agreement (Dec 1, 2009)

Filed December 1, 2009For Securities:AMD

Summary

On November 30, 2009, Advanced Micro Devices, Inc. (AMD) announced the issuance of $500 million in aggregate principal amount of 8.125% Senior Notes due 2017. These notes are general unsecured senior obligations of the company, with interest payable semi-annually. This issuance represents a significant financing event for AMD, providing capital that may be used for various corporate purposes. Furthermore, AMD entered into a Registration Rights Agreement with J.P. Morgan Securities Inc. related to these notes. This agreement obligates AMD to file an exchange offer registration statement to allow holders of these initial notes to exchange them for identical notes ('Exchange Notes') that do not have transfer restrictions. AMD is committed to having this exchange offer completed by August 27, 2010. Failure to meet this deadline could result in an increase in the interest rate on the notes, up to a maximum of 1.00% per annum, due to a 'Registration Default'. Investors should monitor AMD's compliance with this registration requirement as it could impact the cost of debt.

Key Highlights

  • 1AMD issued $500 million in 8.125% Senior Notes due 2017.
  • 2The notes are general unsecured senior obligations.
  • 3Interest on the notes is payable semi-annually on June 15 and December 15.
  • 4A Registration Rights Agreement was signed with J.P. Morgan Securities Inc.
  • 5AMD must file an exchange offer registration statement to exchange initial notes for 'Exchange Notes' by August 27, 2010.
  • 6Failure to meet the registration deadline can result in an interest rate increase of up to 1.00%.

Frequently Asked Questions

The filing does not specify the exact purpose of the $500 million Senior Notes. However, such debt issuances typically provide companies with capital for general corporate purposes, which could include funding operations, investments, research and development, or acquisitions.

As general unsecured senior obligations, the notes carry the risk inherent in corporate debt, including the risk of default if AMD's financial condition deteriorates. Specific risks mentioned include potential 'Events of Default' that could lead to accelerated maturity, such as missed payments, breaches of covenants, or significant judgments against the company. Additionally, a failure to complete the exchange offer by the specified deadline could result in increased interest payments.

A 'Registration Default' occurs if AMD fails to have its exchange offer registration statement declared effective by the SEC and the exchange offer is not consummated by August 27, 2010. The consequence is an initial increase of 0.25% per annum in the interest rate on the notes, with potential further increases of 0.25% for every 90-day period the default persists, up to a maximum aggregate increase of 1.00%.

No, the filing explicitly states that the company's obligations under the Notes are not guaranteed by any third party.