RE: Stockman on AMD debt
Thanks for the citations: I was struck by the nonspecificity (i.e. concealment of facts) in AMD's 10Q2:
"In 1996, the Company entered into a syndicated bank loan agreement (the Credit Agreement), which provides for a $150 million three-year secured revolving line of credit (which is currently unused) and a $250 million four-year secured term loan. All of the secured term loan is outstanding at June 28, 1998. The secured loan is repayable in eight equal quarterly installments of approximately $31 million commencing in October 1998. As of June 28, 1998, the Company also had
available unsecured uncommitted bank lines of credit in the amount of $66 million, of which $5 million was outstanding.
In February and June 1998, certain of the covenants under the Credit
Agreement, including those related to the modified quick ratio, minimum tangible net worth and fixed charge coverage
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ratio, were amended at the request of the Company. The Company sought to amend the covenants because otherwise it risked violating certain of the covenants unless it scaled back on its business and capital investment plan. As of June 28, 1998, the Company is in compliance with all covenants under the Credit Agreement.
In the event the Company is unable to meet its obligation to make loans to, or equity investments in, AMD Saxony as required under the Dresden Loan Agreement,AMD Saxony will be unable to complete Dresden Fab 30 and the Company will be in default under the Dresden Loan Agreement, the Credit Agreement and the Indenture, which would permit acceleration of indebtedness, which would have a material adverse effect on the Company. There can be no assurance that the Company will be able to obtain the funds necessary to fulfill these obligations
and any such failure would have a material adverse effect on the Company.
The Company believes that cash flows from operations and current cash balances, together with external financing activities, will be sufficient to fund operations and capital investments through at least the second quarter of 1999."
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