Summary
Advanced Micro Devices, Inc. (AMD) filed an 8-K report on August 4, 2010, disclosing a material definitive agreement related to the issuance of new debt. Specifically, the company issued $500 million in aggregate principal amount of 7.75% Senior Notes due in 2020. These notes are general unsecured senior obligations, with interest payments scheduled semi-annually starting February 1, 2011, and a maturity date of August 1, 2020. The filing also detailed a related Registration Rights Agreement with J.P. Morgan Securities Inc. This agreement obligates AMD to file an exchange offer registration statement with the SEC for an offer to exchange these initial notes for notes with identical terms but without transfer restrictions or potential interest rate increases. AMD must complete this exchange offer by May 1, 2011, or face potential interest rate increases on the notes, escalating by 0.25% every 90 days, up to a maximum of 1.00%, if certain registration deadlines are missed. This debt issuance provides AMD with additional capital, while the registration rights agreement aims to facilitate the free trading of these securities.
Key Highlights
- 1AMD issued $500 million in 7.75% Senior Notes due August 1, 2020.
- 2The notes are unsecured senior obligations of the company.
- 3Interest payments on the notes are due on February 1 and August 1, commencing February 1, 2011.
- 4A Registration Rights Agreement requires AMD to register the notes for exchange into freely tradable notes by May 1, 2011.
- 5Failure to meet the registration deadline can result in interest rate increases of up to 1.00% per annum.
- 6The Indenture outlines specific 'Events of Default' that could lead to accelerated maturity of the notes.