AMD 2009 Annual Report Download - page 32

Our debt instruments impose restrictions on us that may adversely affect our ability to operate our
business.
The indenture governing our 8.125% Senior Notes due 2017 (8.125% Notes) contains various covenants
which limit our ability to:
• incur additional indebtedness;
• pay dividends and make other restricted payments;
• make certain investments, including investments in our unrestricted subsidiaries;
• create or permit certain liens;
• create or permit restrictions on the ability of certain restricted subsidiaries to pay dividends or make
other distributions to us;
• use the proceeds from sales of assets;
• enter into certain types of transactions with affiliates; and
• consolidate or merge or sell our assets as an entirety or substantially as an entirety.
In addition, the guarantee agreement related to the euro 700 Million Term Loan Facility Agreement for
AMD Fab 36 Limited Liability Company & Co. KG (Fab 36 Term Loan Agreement) that we transferred to GF
contains restrictive covenants that require us to maintain specified financial ratios when group consolidated cash
(including GF cash and cash equivalents) is below specified amounts. Our ability to satisfy these financial ratios
and tests can be affected by events beyond our control. We cannot assure you that we will meet those
requirements. A breach of any of these financial ratios or tests could result in a default under the Fab 36 Term
Loan Agreement.
The agreements governing our borrowing arrangements contain cross-default provisions whereby a default
under one agreement would likely result in cross defaults under agreements covering other borrowings. For
example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an
amount in excess of $50 million would cause a cross default under the indentures governing our 8.125% Notes,
5.75% Convertible Senior Notes due 2012 (5.75% Notes) and the 6.00% Convertible Senior Notes due 2015
(6.00% Notes). The occurrence of a default under any of these borrowing arrangements would permit the
applicable note holders to declare all amounts outstanding under those borrowing arrangements to be
immediately due and payable. If the note holders or the trustee under the indentures governing our 8.125% Notes,
5.75% Notes or 6.00% Notes accelerate the repayment of borrowings, we cannot assure you that we will have
sufficient assets to repay those borrowings and our other indebtedness.
In the event of a change of control, we may not be able to repurchase our outstanding debt as required by
the applicable indentures, which would result in a default under the indentures.
Upon a change of control, we will be required to offer to repurchase all of the 8.125% Notes then
outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but
excluding, the repurchase date. Moreover, the indentures governing our 5.75% Notes and 6.00% Notes require us
to offer to repurchase these securities upon certain change of control events. As of December 26, 2009, the
aggregate outstanding principal amount of the outstanding 8.125% Notes, 5.75% Notes and 6.00% Notes was
$2.8 billion. Future debt agreements may contain similar provisions. We may not have the financial resources to
repurchase our indebtedness.
If we are unable to continue to implement our cost cutting efforts, our business could be materially
adversely affected.
In 2008 and the first quarter of 2009, we took a number of actions to decrease our expenses. For example, in
the second and fourth fiscal quarters of 2008, we implemented restructuring plans to reduce our expenses. The
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