AMD 2013 Annual Report Download - page 102

Potential Repurchase of Outstanding Notes
The Company may elect to purchase or otherwise retire the 6.00% Notes, 8.125% Notes, 7.75% Notes and
7.50% 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. Subsequent to December 28, 2013, the Company repurchased an additional $64
million in principal amount of the 6.00% Notes (which is a portion of the outstanding 6.00% Notes).
Secured Revolving Line of Credit
On November 12, 2013, the Company and its subsidiary, AMD International Sales & Service, Ltd.
(together, the Borrowers), entered into a loan and security agreement (the Loan Agreement) for a senior secured
asset based line of credit for a principal amount up to $500 million (the Secured Revolving Line of Credit) with
up to $75 million available for issuance of letters of credit, with a group of lenders and Bank of America, N.A.,
acting as agent for the lenders (the Agent). The Secured Revolving Line of Credit matures on November 12,
2018. Borrowings under the Secured Revolving Line of Credit are limited to up to 85% of eligible account
receivable minus certain reserves. The borrowings of the Secured Revolving Line of Credit may be used for
general corporate purposes, including working capital needs.
The Borrowers can elect that the borrowings under the Secured Revolving Line of Credit may bear interest
at a rate per annum equal to (a) London Interbank Offered Rate (LIBOR) plus an applicable margin ranging from
2.00% to 2.75%, or (b) (i) the greater of (x) the Agent’s prime rate, (y) the federal funds rate as published by the
Federal Reserve Bank of New York plus 0.50%, and (z) LIBOR for a one-month period plus 1.00%, plus (ii) an
applicable margin ranging from 1.00% to 1.75%. The applicable margin to be applied to the borrowings under
the Company’s Secured Revolving Line of Credit is dependent on the Borrowers achieving a certain fixed charge
coverage ratio. The Secured Revolving Line of Credit may be optionally prepaid or terminated or unutilized
commitments may be reduced, in each case at any time without premium or penalty. In connection with the
Secured Revolving Line of Credit, the Borrowers are required to pay an unused line fee equal to 0.50% per
annum, payable monthly on the unused amount of the commitments under the Secured Revolving Line of Credit.
The unused line fee decreases to 0.375% per annum when more than 50% of the Secured Revolving Line of
Credit is utilized. The Borrowers will pay (i) a monthly fee on all letters of credit outstanding under the Secured
Revolving Line of Credit equal to the applicable LIBOR margin and (ii) a fronting fee to the Agent equal to
0.125% of all such letters of credit, payable monthly in arrears.
The obligations under the Loan Agreement are secured by a first priority basis in the Borrowers’ account
receivable, inventory and certain deposit accounts and specified related assets.
The Loan Agreement contains covenants that place certain restrictions on the Borrowers’ ability to, among
other things, amend or modify certain terms of any debt of $50 million or more or subordinated debt, create or
suffer to exist any liens upon accounts or inventory, sell or transfer any of Borrowers’ accounts or inventory
other than certain ordinary-course transfers, make certain changes to either Borrower’s name or form or state of
organization without notifying the Agent, or liquidate, dissolve, merge, combine or consolidate. Further
restrictions apply during a domestic cash trigger period (a Domestic Cash Trigger Period), which occurs (i) upon
an event of default or (ii) when the amount of domestic cash or cash equivalents held in certain accounts is at any
time less than $500 million, and ends when both (a) no event of default has existed for 45 days and (b) the
amount of domestic cash or cash equivalents held in such accounts has been equal to or greater than $500 million
for 45 days. Such restrictions limit the Borrowers’ ability to, among other things, allow certain subsidiaries that
manufacture or process inventory for the Borrowers to borrow secured debt or unsecured debt beyond a certain
amount, create any liens upon any of the Borrowers’ property (other than customary permitted liens and liens on
up to $1.5 billion of secured credit facilities debt (which amount includes the Secured Revolving Line of
Credit)), declare or make any distributions, create any encumbrance on the ability of a subsidiary to make any
upstream payments, make asset dispositions other than certain ordinary course dispositions, make certain loans,
make payments with respect to subordinated debt or certain borrowed money prior to its due date, become a party
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