Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 214.11

+3.9%

Nov 26 3:59 PM EST

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To: dougSF30 who wrote (185509)	1/27/2006 7:30:17 PM
From: brushwud	Read Replies (1) of 275872

the $20M charge is a 'pre-payment penalty' Here a charge, there a charge, every Q another charge. But they're each 'non-recurring', so pay them no mind. 107.75% of principal + interest on $210 of principal debt They issued these things in October 2004, so they paid interest on the part they're retiring for 1-1/3 years. That's about 10.25% plus the prepayment penalty of 7.75%, a total of 18%. That means they managed to pay 13.5% per annum on this money. And who knows whether before 2012, 7.75% might look good. It's even worse considering the sweeteners they had to pay to convert some of the convertibles in 2004 in order to improve their balance sheet so they could qualify for lower interest on this debt they're retiring anyway. If they had never paid the sweeteners, they'd still have converted both convertible issues by now. Their balance sheet is starting to look great, but they've thrown away a lot of money on these 'pre-payment penalties'.

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