AMD 2008 Annual Report Download - page 141

• AMD Fab 36 KG’s noncompliance with certain affirmative and negative covenants, including
restrictions on payment of profits, dividends or other distributions except in limited circumstances and
restrictions on incurring additional indebtedness, disposing of assets and repaying subordinated debt;
and
• AMD Fab 36 KG’s noncompliance with certain financial covenants, including loan to fixed asset value
ratio and, in certain circumstances, a minimum cash covenant.
In general, any default with respect to other indebtedness of AMD or AMD Fab 36 KG that is not cured,
would result in a cross-default under the Fab 36 Loan Agreements.
The occurrence of a default under the Fab 36 Loan Agreements would permit the lenders to accelerate the
repayment of all amounts outstanding under the Fab 36 Term Loan. In addition, the occurrence of a default under
this agreement could result in a cross-default under the indenture governing the Company’s 7.75% Notes, 6.00%
Notes, and 5.75% Notes. In the event the transactions contemplated by the Master Transaction Agreement are
consummated and the approval of the lenders is received, the Company’s ownership interests in AMD Fab 36
Holding GmbH, AMD Fab 36 Admin GmbH, AMD Fab 36 KG and AMD Fab 36 LLC, the group of German
subsidiaries that own Fab 36, as well as the Fab 36 Term Loan and related agreements will be transferred to The
Foundry Company, whose financial results will continue to be consolidated in the Company’s consolidated
financial statements. In addition, immediately prior to the consummation of the transactions contemplated by the
Master Transaction Agreement, AMD Fab 36 Holding and AMD Fab 36 Admin intend to repurchase the limited
and silent partnership interests in AMD Fab 36 KG held by Leipziger Messe, who will withdraw as a partner of
AMD Fab 36 KG.
7.75% Senior Notes Due 2012
On October 29, 2004, the Company issued $600 million of 7.75% Senior Notes due 2012 (the 7.75% Notes)
in a private offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. On
April 22, 2005, the Company exchanged these notes for publicly registered notes which have substantially
identical terms as the old notes except that the 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. From November 1, 2008, the Company 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 the Company to repurchase all or a portion of the Company’s 7.75% Notes
in the event that the Company undergoes 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, the
Company’s ability and the ability of the Company’s restricted subsidiaries, which include all of the Company’s
subsidiaries, from:
• incurring additional indebtedness, except specified permitted debt;
• paying dividends and making other restricted payments;
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