Summary
Advanced Micro Devices, Inc. (AMD) announced on June 10, 2019, the execution of a new $500 million secured revolving credit facility. This facility matures in five years and includes subfacilities for swingline loans and letters of credit, offering significant financial flexibility. Crucially, the company has the option to expand this facility or incur additional debt under certain conditions, demonstrating a proactive approach to managing its capital structure and funding future growth. The new credit agreement replaces a previous arrangement and is secured by a lien on substantially all of the Company's and its guarantors' property, excluding intellectual property. The collateral and guarantees can be released upon achievement of certain corporate ratings from major credit agencies, indicating a path towards unsecured financing as the company's financial standing improves. The agreement also includes customary financial covenants and events of default, typical for corporate credit facilities.
Key Highlights
- 1Entry into a new $500 million secured revolving credit facility with a five-year maturity.
- 2The facility includes a $50 million swingline subfacility and a $75 million letter of credit sublimit.
- 3Potential to increase the revolving facility or incur incremental debt up to certain thresholds, subject to conditions.
- 4Borrowings bear variable interest rates (LIBOR or base rate) plus an applicable margin, with commitment fees on undrawn amounts.
- 5Obligations are secured by a lien on substantially all company property (excluding intellectual property) and guaranteed by certain subsidiaries.
- 6Provisions for collateral and guarantee release based on achieving specific corporate credit ratings (e.g., Ba1/BB+/BB+).
- 7Termination and full repayment of all outstanding obligations under the previous Amended and Restated Loan and Security Agreement dated April 14, 2015.