AMD 2004 Annual Report Download - page 42

Table of Contents
4.50% Convertible Senior Notes Due 2007
On November 25, 2002, we issued $402.5 million of 4.50% Convertible Senior Notes due 2007 (the 4.50% Notes) in a registered offering. Interest on the
4.50% Notes is payable semiannually in arrears on June 1 and December 1 of each year, beginning June 1, 2003. Beginning on December 4, 2005, the 4.50%
Notes are redeemable by us at our option for cash at specified prices expressed as a percentage of the outstanding principal amount plus accrued and unpaid
interest, provided that we may not redeem the 4.50% Notes unless the last reported sale price of our common stock is at least 150 percent of the then-effective
conversion price for at least 20 trading days within a period of 30 trading days ending within five trading days of the date of the redemption notice.
The redemption prices for the specified periods are as follows:
Period
Price as a
Percentage of
Principal Amount
Beginning on December 4, 2005 through November 30, 2006 101.800%
Beginning on December 1, 2006 through November 30, 2007 100.900%
On December 1, 2007 100.000%
The 4.50% Notes are convertible at the option of the holder at any time prior to the close of business on the business day immediately preceding the
maturity date of December 1, 2007, unless previously redeemed or repurchased, into shares of common stock at a conversion price of $7.37 per share, subject to
adjustment in certain circumstances. At this conversion price, each $1,000 principal amount of the 4.50% Notes will be convertible into approximately 135
shares of our common stock. Issuance costs incurred in the amount of approximately $12 million are amortized ratably, over the term of the 4.50% Notes, as
interest expense, approximating the effective interest method.
Holders have the right to require us to repurchase all or a portion of our 4.50% Notes in the event that we undergo specified fundamental changes,
including a change of control. In each such case, the redemption or repurchase price would be 100 percent of the principal amount of the 4.50% Notes plus
accrued and unpaid interest.
As of December 26, 2004 we had exchanged an aggregate of $201 million of our 4.50% Notes for 29,391,261 shares of our common stock in a series of
transactions. As a result of these transactions, we recognized a charge of approximately $32 million, which represented the difference between the fair value of
the shares issued in the transactions and the fair value of shares issuable pursuant to the original conversion terms of the 4.50% Notes.
We may elect to purchase or otherwise retire the remainder of our 4.50% Notes with cash, stock or other assets from time to time in open market or
privately negotiated transactions, either directly or through intermediaries, or by tender offer when we believe that market conditions are favorable to do so. Such
purchases may have a material effect on our liquidity, financial condition and results of operations.
7.75% Senior Notes Due 2012
On October 29, 2004, we issued $600 million of 7.75% Senior Notes due 2012 (the 7.75% Notes) in a private offering pursuant to Rule 144A and
Regulation S under the Securities Act of 1933, as amended. We used the net proceeds from the sale of the 7.75% Notes plus existing cash to prepay the full
amount outstanding under the Dresden Term Loan, including accrued and unpaid interest and a prepayment premium. See “Repayment of Dresden Term Loan,”
below. The 7.75% Notes mature on November 1, 2012. Interest on the 7.75% Notes is payable semiannually in arrears on May 1 and November 1, beginning
May 1, 2005. Prior to November 1, 2008, we may redeem some or all of the 7.75% Notes at a price equal to 100% of the principal amount plus accrued and
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005