AMD 2006 Annual Report Download - page 123

Table of Contents
NOTE 9: Debt
Long-term Borrowings and Obligations
The Company’s long-term debt and capital lease obligations as of December 31, 2006 and December 25, 2005 consist of:
2006 2005
(In millions)
October 2006 Term loan $ 2,216 $ —
Fab 36 Term Loan 893 —
Repurchase obligations to Fab 36 Partners 126 152
4.75% Convertible Debentures Due 2022 — 500
7.75% Senior Notes Due 2012 390 600
Obligations under capital leases 160 113
Other 12 5
3,797 1,370
Less: current portion 125 43
Long-term debt and capital lease obligations, less current portion $ 3,672 $ 1,327
October 2006 Term Loan
On October 24, 2006, the Company entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as Syndication Agent and Administrative
Agent, Wells Fargo Bank, N.A., as Collateral Agent, and other lenders that may become party thereto from time to time (October 2006 Term Loan), pursuant to
which the Company borrowed an aggregate amount of $2.5 billion to finance a portion of the acquisition of ATI and related fees and expenses.
Amounts borrowed under the October 2006 Term Loan bear interest, in the case of base rate loans, at a rate equal to the “base rate,” which is the higher of
(i) the prime rate published by the Wall Street Journal and (ii) 0.5 percent per annum above the Federal Funds Effective Rate (as defined in the October 2006
Term Loan) plus a 1.25 percent margin, or in the case of Eurodollar loans, at a rate equal to the Eurodollar Rate (as defined in the October 2006 Term Loan) plus
a 2.25 percent margin. Such margins will reduce by 0.25 percent when the outstanding aggregate principal amount under the October 2006 Term Loan is less
than $1.75 billion. As of October 24, 2006, the base rate was 8.25 percent, without the margin, and the Eurodollar Rate was 5.32 percent, without the margin.
Pursuant to the October 2006 Term Loan, the Company may select an interest period of one, two, three, six or if available to all the lenders, nine or twelve
months for each loan. The rate of interest is reset at the beginning of each new interest period. The October 2006 Term Loan is repayable in quarterly
installments commencing in December 2006 and terminating in December 2013. The initial twenty-five quarterly payments are in the principal amount of
approximately $6 million. The final four quarterly repayments are in the principal amount of approximately $521 million. At December 31, 2006, the interest
rate, which is based on the Eurodollar Rate, on the October 2006 Term Loan was 7.62 percent.
The Company may prepay the October 2006 Term Loan at any time without premium or penalty. In addition, the Company is required to prepay the
October 2006 Term Loan with: (i) 100 percent of the net cash proceeds from any debt incurred by the Company or a restricted subsidiary; (ii) 50 percent of net
cash proceeds from the issuance of any capital stock by the Company (subject to specified exceptions); (iii) 100 percent of extraordinary receipts (as defined in
the October 2006 Term Loan) in excess of $30 million; (iv) 100 percent of net cash proceeds from asset sales outside of the ordinary course of business in excess
of $30 million, subject to a reinvestment allowance; (v) commencing with the fiscal year ending December 30, 2007, 50 percent of excess cash flow; and (vi) 100
percent of net cash proceeds from sale of capital stock of Spansion Inc. Prepayment of the October 2006 Term Loan from 50 percent of “excess cash flow” as
used in the preceding clause (v), is intended to reach the Company’s cash income that is not actually applied to certain limited uses that merit
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007