AMD 2008 Annual Report Download - page 89

Fab 36 Term Loan was $705 million. AMD Fab 36 KG may select an interest period of one, two, or three months
or any other period agreed between AMD Fab 36 KG and the lenders. The rate of interest on each installment for
the interest period selected is the percentage rate per annum which is the aggregate of the applicable margin, plus
LIBOR plus minimum reserve cost if any. As of December 27, 2008, the rate of interest for the initial interest
period was 6.51 percent for the First Installment and 5.63688 percent for the Second Installment. This loan is
repayable in quarterly installments, which commenced in September 2007 and terminates in March 2011. An
aggregate of $188 million has been repaid as of December 27, 2008.
The amended and restated Fab 36 Term Loan also sets forth certain covenants applicable to AMD Fab 36
KG. For example, for as long as group consolidated cash is at least $1 billion, our credit rating is at least B3 by
Moody’s and B- by Standard & Poor’s, and no event of default has occurred, the only financial covenant that
AMD Fab 36 KG is required to comply with is a loan to fixed asset value covenant. Specifically, the loan to fixed
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 ................... 50percent
up to and including 31 December 2009 ................... 45percent
thereafter ........................................... 40percent
As of December 27, 2008, 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 balance 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
5 percent of the total outstanding amount, and at each subsequent request of Dresdner Bank, by a further 5
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. Our credit rating was B3 with Moody’s and B with Standard and Poor’s as of December 27, 2008.
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
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