AMD 2008 Annual Report Download - page 134

The 5.75% Notes will be convertible, in whole or in part, at any time prior to the close of business on the
business day immediately preceding the maturity date of the 5.75% Notes, into shares of the Company’s common
stock based on an initial conversion rate of 49.6771 shares of common stock per $1,000 principal amount of the
5.75% Notes, which is equivalent to an initial conversion price of approximately $20.13 per share. This initial
conversion price represents a premium of 50% relative to the last reported sale price of the Company’s common
stock on August 8, 2007 (the trading date preceding the date of pricing of the 5.75% Notes) of $13.42 per share.
This initial 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 5.75%
Indenture) of the Company under certain circumstances. Holders of the 5.75% Notes may require the Company
to repurchase the 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 (as defined in the 5.75% Indenture) or a termination of
trading (as defined in the Indenture). Additionally, an event of default (as defined in the Indenture) may result in
the acceleration of the maturity of the 5.75% Notes.
The 5.75% Notes rank equally in right of payment with the Company’s existing and future senior debt and
senior in right of payment to all of the Company’s future subordinated debt. The 5.75% Notes rank junior in right
of payment 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.
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).
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