Advanced Micro to sell $500 mln convertible debt
(Another desperate AMD move to generate revenue for capital expenditures?)
biz.yahoo.com
SUNNYVALE, Calif., Jan 23 (Reuters) - Advanced Micro Devices Inc. (NYSE:AMD - news), the No. 2 maker of microprocessors, said late Wednesday it plans to privately sell $500 million of senior debt convertible into company stock.
The Sunnyvale, California-based company said it intends to use proceeds for capital expenses, working capital and general corporate purposes. It did not specify a maturity for the debt, but said it may sell another $100 million of debt if there is enough demand.
A convertible bond is a stock-bond hybrid that usually offers current income and can be converted into company stock. Their fortune is closely tied to the underlying stock price.
AMD shares closed Wednesday on the New York Stock Exchange at $16.70, up 41 cents. Their 52-week closing high is $34.40, set last May 21, and their 52-week closing low is $7.93, set last Oct. 1.
Shares often fall after a company announces a convertible sale because some investors sell the underlying stock short, the bonds may dilute the stock and bondholders rank ahead of shareholders in a company's capital structure. AMD announced its sale after U.S. markets closed.
AMD said in a securities filing it had about 339.8 million common shares outstanding as of Nov. 2, 2001.
wbmw |
