AMD 2007 Annual Report Download - page 123

Table of Contents
registration statement with the SEC for the resale by holders of the 5.75% Notes and the shares of the Company’s common stock issuable upon conversion of the
notes, use the Company’s reasonable best efforts to cause the registration statement to be declared effective and keep the registration statement effective for the
period described in the 5.75% Registration Rights Agreement. To date, the Company has satisfied these terms and conditions. On November 7, 2007, the
Company filed a shelf registration statement that was automatically declared effective. The Company will file with the SEC a post-effective amendment to the
shelf registration statement, prepare and file a supplement to the prospectus, or file a new shelf registration statement on a quarterly basis in order to include any
additional selling security holders in the shelf registration statement. The Company could be subject to paying additional interest on the 5.75% Notes for the
period during which a default under the 5.75% Registration Rights Agreement exists.
The net proceeds from the offering, after deducting discounts, commissions and offering expenses payable by the Company, were approximately $1.5
billion. The Company used all of the net proceeds, together with available cash, to repay in full the remaining outstanding balance of the October 2006 Term
Loan. All security interests under the October 2006 Term Loan have been released. In connection with this repayment, the Company recorded a charge of
approximately $17 million to write off the remaining unamortized debt issuance costs associated with the October 2006 Term Loan.
The Company may elect to purchase or otherwise retire its 5.75% 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 the Company believes the market conditions are favorable to do so.
Such purchases may have a material effect on the Company’s liquidity, financial condition and results of operations.
6.00% Convertible Senior Notes due 2015
On April 27, 2007, the Company issued $2.2 billion aggregate principal amount of 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes). The
6.00% Notes bear interest at 6.00% per annum. Interest is payable on May 1 and November 1 of each year beginning November 1, 2007 until the maturity date of
May 1, 2015. The terms of the 6.00% Notes are governed by an Indenture (the 6.00% Indenture) dated April 27, 2007, by and between the Company and Wells
Fargo Bank, National Association, as Trustee.
Upon the occurrence of certain events described in the 6.00% Indenture, the 6.00% Notes will be convertible into cash up to the principal amount, and if
applicable, into shares of the Company’s common stock issuable upon conversion of the 6.00% Notes (6.00% Conversion Shares) in respect of any conversion
value above the principal amount, based on an initial conversion rate of 35.6125 shares of common stock per $1,000 principal amount of 6.00% Notes, which is
equivalent to an initial conversion price of $28.08 per share. This initial conversion price represents a premium of 100% relative to the last reported sale price of
the Company’s common stock on April 23, 2007 (the trading date preceding the date of pricing of the 6.00% Notes) of $14.04 per share. The conversion rate will
be adjusted for certain anti-dilution events. In addition, the conversion rate will be increased in the case of corporate events that constitute a fundamental change
(as defined in the 6.00% Indenture) under certain circumstances. Holders of the 6.00% Notes may require the Company to repurchase the 6.00% Notes for cash
equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the occurrence of a fundamental change or a termination of
trading (as defined in the 6.00% Indenture). Additionally, an event of default (as defined in the 6.00% Indenture) may result in the acceleration of the maturity of
the 6.00% Notes.
The 6.00% Notes rank equally with the Company’s existing and future senior debt and are senior to all of the Company’s future subordinated debt. The
6.00% Notes rank junior to all of the Company’s existing and future senior secured debt to the extent of the collateral securing such debt and are structurally
subordinated to all existing and future debt and liabilities of the Company’s subsidiaries.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008