Hi Goutama Sai Kantamaneni; I've been delving in the depths
of the Edgar files, and have dug out the following choice
paragraphs for AMD's convertible debt:
FROM THE LATEST 10-K:
In 1998, interest expense primarily consisted of interest expense incurred on
our Senior Secured Notes sold in August 1996, interest on our Convertible
Subordinated Notes sold in May 1998 and interest on our $250 million four-year
secured term loan, net of interest capitalized primarily related to the
facilitization of Fab 25 and construction of Dresden Fab 30.
FROM MAY, 1998 8-K:
5. Redemption. The Securities may be redeemed in whole or from time to
----------
time in part at any time on and after May 15, 2001 at the option of the Company,
at the following redemption prices (expressed as a percentage of principal
amount) set forth below if redeemed during the 12-month periods commencing on
the dates indicated below, in each case (subject to the right of holders of
record on a record date to receive interest due on an Interest Payment Date that
is on or prior to such Redemption Date) plus any accrued but unpaid interest, if
any, to, but excluding, the Redemption Date. The Securities may not be so
redeemed prior to May 15, 2001; provided, however, that the Securities will not
be redeemable prior to May 15, 2002, unless the last reported sale price of the
Common Stock is at least 130% of the then effective Conversion Price for at
least 20 Trading Days within a period of 30 consecutive Trading Days ending
within 5 Trading Days of the date of the redemption notice.
5 If redeemed during
the 12-month period
beginning on Redemption Price
-------------------- ----------------
May 15, 2001 103.429%
May 15, 2002 102.571
May 15, 2003 101.714
May 15, 2004 100.857
...
Holders have the right to convert the principal amount of the Securities into
fully paid and nonassessable shares of Common Stock of the Company at the
initial conversion price per share of Common Stock of $37.00 (which reflects a
conversion rate of approximately 27.0270 shares of Common Stock per $1,000 in
principal amount of Securities), or at the adjusted Conversion Price then in
effect, if adjustment has been made as provided in the Officers' Certificate,
upon surrender of the Security to the Company, together with a fully executed
notice in substantially the form attached hereto and, if required by the
Officers' Certificate, an amount equal to accrued interest payable on such
Security.
Looks to me that the street (and AMD) has a certain amount
of interest in running the convertibles. The conversion
requirement would be 30 days of trading above:
$37 * 1.03429 * 1.30 = $49.75
Too bad this can't happen until May, 2001, but if it
happens then, it will reduce the amount of debt that the
company holds by $450MM. Investors might consider the
convertible as a holding, rather than the stock.
-- Carl |
