AMD 2006 Annual Report Download - page 292

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
Spansion Penang Building Loan
On December 20, 2005, Spansion Penang assumed approximately 19.3 million Malaysian Ringgit (approximately $5 million based on the exchange rate as
of December 20, 2005) of an unsecured promissory note, payable to AMD Export, in connection with the sale of certain assets by AMD Export to Spansion
Penang.
On June 28, 2006, the Company repaid AMD the remaining outstanding principal of approximately 19.3 million Malaysian Ringgit (approximately $5.4
million based on the exchange rate as of June 28, 2006) under the Spansion Penang Building Loan.
Senior Subordinated Notes
On December 21, 2005, the Company issued to AMD $175 million aggregate principal amount of its 12.75% Senior Subordinated Notes Due 2016. The
senior subordinated notes were issued at 90.828 percent of face value, resulting in net proceeds of approximately $158.9 million.
On June 12, 2006, the Company repurchased and cancelled the 12.75% Senior Subordinated Notes. The Company recognized a loss on early
extinguishment of debt of approximately $17.3 million as a result of the repurchase of these notes. The loss included the write-off of debt issuance costs of
approximately $2.0 million and the write-off of unamortized debt discount of approximately $15.3 million.
Promissory Note
On February 27, 2006, the Company purchased a software license from AMD and, as payment, the Company issued a $3.0 million promissory note to
AMD. As of December 31, 2006, the Company has repaid $2.5 million of the principal of the promissory note. The remaining balance of $0.5 million is due in
the first quarter of 2007.
Debt Obligations to Third Parties
Spansion Japan Term Loan
Spansion Japan entered into a term loan with a Japanese financial institution in September 2003.
On December 30, 2005, Spansion Japan voluntarily prepaid and terminated the Spansion Japan Term Loan agreement. There were no penalties associated
with the prepayment and termination of this loan agreement.
Spansion China Bank Enterprise Cooperation Revolver
On December 1, 2005, Spansion China entered into a bank enterprise cooperation agreement with a local financial institution, effective as of October 24,
2005. Under the terms of the agreement, Spansion China may draw under two credit facilities, equal to U.S. $26 million and RMB 176 million (approximately
$22 million as of October 24, 2005), respectively. Borrowings must be used for working capital purposes. The two credit facilities terminate on June 22, 2008.
The interest rate for each loan denominated in RMB is a floating rate per annum and is set at the time each revolving loan agreement is entered into. The interest
rate may thereafter be adjusted every 12 months at a rate equal to the benchmark rate published by the People’s Bank of China for RMB loans of the same term
less a ten percent discount. The interest rate for each loan denominated in U.S. dollars is a floating rate per annum and is initially set at the time each revolving
loan agreement is entered into, ranging from 5.39 percent to 6.61 percent for the outstanding balance as of December 31, 2006. The interest rate is thereafter
adjusted every six months at a rate equal to the six-month LIBOR plus one percent. The U.S. dollar denominated revolving loan agreements are unsecured.
Under the terms of the agreements, Spansion China is prohibited from encumbering any of its assets.
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007