Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 203.14

-0.8%

Jan 9 9:30 AM EST

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To: Petz who wrote (68722)	1/23/2002 10:38:55 PM
From: niceguy767	Read Replies (1) of 275872

John: "I think the "private" aspect of the CV bond sale makes it even more likely that the bonds will be given to UMC for use of it's fabs in expanding AMD's capacity. If AMD is optimistic about yields and market demand, they are better off prepaying for the partial output of a fab, rather than paying for each part." In the CV bond statement, AMD also suggested that they'd issue another $100 million if "there was enough demand"...If UMC, an evolving deal as we speak... "EDIT - another reason this makes sense is that, if AMD is correct and there is high demand for the output of the UMC fab(s), then AMD stock price will rise and UMC will also gain extra profit from the deal." The estimated 4.25 to 4.75 percent coupon, and convertibility into AMD shares at a 40 percent to 45 percent premium over the shares' Wednesday closing price on the New York Stock Exchange of $16.70 (i.e approx. $23), combined with the fact that the bonds aren't callable for 3 years does seem to offer the investor a very "fair" return. (Heck, there was at least 2 contest participants who thought AMD'd be at $23 by now) "Has something like that ever been done at a foundry?" No that I've heard of... The very curious aspect of this deal apart from its being "private" is the implied haste with which this deal seems to be unfolding...almost as if something "out of the blue" requiring an immediate response has arisen...either an investor needs to place $500 million for 3 years immediately or an investment opportunity unexpectedly surfaced...

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