AMD 2006 Annual Report Download - page 83

Table of Contents
asset value (as defined in the agreement) as at the end of any relevant period specified in Column A below cannot exceed the percentage set out opposite such
relevant period in Column B below:
Column A Column B
(Relevant Period) (Maximum Percentage of Loan
to Fixed Asset Value)
up to and including 31 December 2008 50 percent
up to and including 31 December 2009 45 percent
thereafter 40 percent
As of December 31, 2006, AMD Fab 36 KG was in compliance with this covenant.
If group consolidated cash is less than $1 billion or our credit rating is below B3 by Moody’s and B- by Standard & Poor’s, AMD Fab 36 KG will also be
required to maintain minimum cash balances equal to the lesser of 100 million euros and 50 percent of the total outstanding amount under the Fab 36 Term Loan.
AMD Fab 36 KG may elect to maintain the minimum cash balances in an equivalent amount of U.S. dollars if group consolidated cash is at least $500 million. If
on any scheduled repayment date, our credit rating is Caa2 or lower by Moody’s or CCC or lower by Standard & Poor’s, AMD Fab 36 must increase the
minimum cash balances by five percent of the total outstanding amount, and at each subsequent request of Dresdner Bank, by a further five percent of the total
outstanding amount until such time as either the credit rating increases to at least Ba3 by Moody’s and BB- by Standard & Poor’s or the minimum cash balances
are equal to the total outstanding amounts.
AMD Fab 36 KG pledged substantially all of its current and future assets as security under the Fab 36 Loan Agreements, we pledged our equity interest in
AMD Fab 36 Holding and AMD Fab 36 LLC, AMD Fab 36 Holding pledged its equity interest in AMD Fab 36 Admin and its partnership interest in AMD Fab
36 KG and AMD Fab 36 Admin and AMD Fab 36 LLC pledged all of their partnership interests in AMD Fab 36 KG. We guaranteed the obligations of AMD
Fab 36 KG to the lenders under the Fab 36 Loan Agreements. We also guaranteed repayment of grants and allowances by AMD Fab 36 KG, should such
repayment be required pursuant to the terms of the subsidies provided by the federal and state German authorities.
Pursuant to the terms of the Guarantee Agreement among us, as guarantor, AMD Fab 36 KG, Dresdner Bank AG and Dresdner Bank AG, Niederlassung
Luxemburg, we have to comply with specified adjusted tangible net worth and EBITDA financial covenants if the sum of our group consolidated cash declines
below the following amounts:
Amount
(in millions)
if Moody’s
Rating is at
least
if Standard & Poor’s Rating
is at least
$500 B1 or lower and B+ or lower
425 Ba3 and BB-
400 Ba2 and BB
350 Ba1 and BB+
300 Baa3 or better and BBB-or better
As of December 31, 2006, group consolidated cash was greater than $500 million and therefore, the preceding financial covenants were not applicable.
If our group consolidated cash declines below the amounts set forth above, we would be required to maintain adjusted tangible net worth, determined as of
the last day of each preceding fiscal quarter, of not less than the amounts set forth below:
Measurement Date on fiscal quarter ending
Amount
(In millions)
December 2005 $ 1,500
March 2006 and on the last day of each fiscal quarter thereafter $ 1,750
In addition, if our group consolidated cash declines below the amounts set forth above, we would be required to maintain EBITDA (as defined in the
agreement) as of the last day of each preceding fiscal period set
78
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007