AMD 2006 Annual Report Download - page 87

Table of Contents
publicly registered notes are registered under the Securities Act of 1933, and, therefore, do not contain legends restricting their transfer. 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 percent of the principal amount plus accrued and unpaid interest plus a
“make-whole” premium, as defined in the agreement. Thereafter, we may redeem the 7.75% Notes for cash at the following specified prices plus accrued and
unpaid interest:
Period
Price as
Percentage of
Principal Amount
Beginning on November 1, 2008 through October 31, 2009 103.875 percent
Beginning on November 1, 2009 through October 31, 2010 101.938 percent
Beginning on November 1, 2010 through October 31, 2011 100.000 percent
On November 1, 2011 100.000 percent
Holders have the right to require us to repurchase all or a portion of our 7.75% Notes in the event that we undergo a change of control, as defined in the
indenture governing the 7.75% Notes at a repurchase price of 101 percent of the principal amount plus accrued and unpaid interest.
The indenture governing the 7.75% Notes contains certain covenants that limit, among other things, our ability and the ability of our restricted subsidiaries,
which include all of our subsidiaries from:
• incurring additional indebtedness;
• paying dividends and making other restricted payments;
• making certain investments, including investments in our unrestricted subsidiaries;
• creating or permitting certain liens;
• creating or permitting restrictions on the ability of the restricted subsidiaries to pay dividends or make other distributions to us;
• using the proceeds from sales of assets;
• entering into certain types of transactions with affiliates; and
• consolidating, merging or selling our assets as an entirety or substantially as an entirety.
In February 2006, we redeemed 35 percent (or $210 million) of the aggregate principal amount outstanding of the 7.75 % Notes. The holders of the 7.75 %
Notes received 107.75 percent of the principal amount of the 7.75 % Notes plus accrued interest. In connection with the redemption, we recorded an expense of
approximately $16 million, which represents the 7.75 % redemption premium that we paid, and a charge of $ 4 million, which represents 35 percent of the
unamortized issuance costs incurred in connection with the original issuance of the 7.75 % Notes. We included these charges in other income (expense), net in
the consolidated statement of operations for the year ended December 31, 2006.
Issuance costs incurred in connection with this transaction in the amount of approximately $13 million will be amortized ratably over the term of the
7.75% Notes as interest expense, approximating the effective interest method. Of this amount, approximately $4 million was charged to other income (expense),
net as a result of redemption described above.
In October 2006, the holders of the 7.75% Notes received a security interest that is equal and ratable to that held by the lenders under the October 2006
Term Loan, See the section entitled “October 2006 Term Loan,” above for more information.
We may elect to purchase or otherwise retire the remaining principal outstanding under our 7.75% 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 the market conditions are
favorable to do so. Such purchases may have a material effect on our liquidity, financial condition and results of operations.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007