What was the primary purpose of this transaction?

The primary purpose of this transaction was to reduce AMD's outstanding convertible debt by exchanging a portion of its 2.125% Convertible Senior Notes due 2026 for newly issued common stock and a cash payment. This deleveraging move helps to simplify the company's capital structure.

How does this affect the number of AMD shares outstanding?

This transaction increases the number of AMD's outstanding shares by approximately 15.75 million. These shares will be factored into future earnings per share (EPS) calculations, potentially diluting EPS if earnings do not grow proportionally.

Was this a public offering of stock?

No, this was not a public offering. The shares were issued directly to existing holders of the convertible notes in exchange for their notes. The company utilized an exemption from registration under Section 3(a)(9) of the Securities Act of 1933, which applies to exchanges with existing security holders where no commission or other remuneration is paid.

What is the impact on AMD's financial statements, particularly EPS?

The transaction reduces AMD's debt obligations. However, it increases the number of shares outstanding, which will be included in the weighted average basic share count for EPS calculations. This means that for the same amount of net income, the EPS could be lower due to the larger number of shares.

AMD 8-K: Securities & Listing & Regulation FD

Summary

Advanced Micro Devices, Inc. (AMD) announced an exchange offer that took place on August 21, 2019, and September 3, 2019. In this transaction, the company issued approximately 15.75 million shares of its common stock along with a cash payment of about $14.8 million. This issuance was in exchange for the retirement of $126 million in aggregate principal amount of its 2.125% Convertible Senior Notes due 2026. This exchange effectively reduces AMD's outstanding debt and also increases its share count. The shares issued are considered unregistered, as they were exchanged with existing noteholders under Section 3(a)(9) of the Securities Act of 1933, indicating no underwriter involvement or commissions paid. For financial reporting purposes, these newly issued shares will be included in the company's weighted average basic share count for earnings per share calculations moving forward.

Key Highlights

1AMD exchanged $126 million of its 2.125% Convertible Senior Notes due 2026 for common stock and cash.
2Approximately 15.75 million shares of AMD common stock were issued in the exchange.
3An aggregate cash payment of approximately $14.8 million was made to noteholders.
4The transaction reduces the company's outstanding debt.
5The issuance of shares was made to existing noteholders in reliance on an exemption from registration (Section 3(a)(9)).
6The newly issued shares will be included in future weighted average basic share counts for EPS calculations.

ADVANCED MICRO DEVICES INC 8-K Report, Unregistered Securities Sale (Sep 6, 2019)

Summary

Key Highlights

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