Summary
Advanced Micro Devices, Inc. (AMD) has filed an 8-K report detailing significant changes to its debt structure. The company entered into a supplemental indenture to reduce the notice period for redeeming its 8.125% Senior Notes due 2017 from 30 days to 3 business days. This action is part of a broader strategy to refinance its debt using proceeds from a recent offering of 7.00% Senior Notes due 2024. Approximately $145.1 million of the 8.125% Notes were tendered in an initial settlement, leaving $133.8 million outstanding. AMD plans to redeem all remaining 8.125% Notes on June 25, 2014, and will use any remaining proceeds from the new note offering to retire other outstanding debt. The company anticipates a charge of approximately $50 million in the second quarter of 2014 related to these transactions, with the overall impact on aggregate outstanding debt expected to be largely neutral.
Key Highlights
- 1AMD amended its debt indenture to shorten the redemption notice period for its 8.125% Senior Notes due 2017 to 3 business days.
- 2The company used proceeds from a recent 7.00% Senior Notes due 2024 offering to purchase tendered 8.125% Notes.
- 3$145.1 million aggregate principal amount of 8.125% Notes were tendered in the initial settlement.
- 4$133.8 million aggregate principal amount of 8.125% Notes remain outstanding after the initial settlement.
- 5AMD will redeem all remaining 8.125% Notes on June 25, 2014.
- 6The company expects to incur an approximate $50 million charge in Q2 2014 related to the note purchase and redemption.
- 7AMD anticipates the overall debt restructuring to be largely neutral in terms of aggregate outstanding debt.