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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (68812)	1/24/2002 7:42:44 PM
From: TimF	Read Replies (1) \| Respond to of 275872

Lower interest rates? Maybe much lower. The fact that the convertable could have a big return if the stock goes up and the fact that interest rates are lower now results in a much lower interest rate. I've seen a couple of posts say that AMD was retireing 11% debt. But then a lot of their debt was the subsidized debt from Germany if thats being paid back there might be no real savings in interest. Anyone out there with some solid info on this? Tim

To: Tenchusatsu who wrote (68812)	1/24/2002 7:50:32 PM
From: Joe NYC	Respond to of 275872

Tenchusatsu. So how would 6-7% dilution for a simple refinancing of debt be considered a "bargain"? Lower interest rates? I think the dilution has 2 forms. One is on paper, second one is when it actually happens, which is when bonds are converted to stock. Before the conversion actually happens, these new shares are just counted in earnings reports, but they don't physically exist. Once the conversion happens, the debt goes away, and AMD ends up basically selling some 21 million shares for $23. Right now, AMD has $1 billion debt (current and long term), if the conversion happens (and everything else remains the same), AMD's debt is cut in half to $500 million Joe

To: Tenchusatsu who wrote (68812)	1/24/2002 8:05:47 PM
From: Gopher Broke	Read Replies (1) \| Respond to of 275872

Firstly the issue has no effect on the outstanding shares unless AMD gains 40%, because noone would exercise below the strike price. And that 40% gain is measured after the "dilution". So the only way it can be considered "dilutive" is that it may take AMD a little longer to hit that 40% target. Secondly, if $300M of convertibles expires this year at below strike then that counterbalances the new issue and the "dilution" becomes 2%-3%. Anyone know what conditions are attached to the maturing debt? Thirdly, I can't see AMD doing worse with the money than 4.75% (plus a few percent to make up for the "dilution"). Strange that if this had been a share issue to buy a company that added a few pence to the bottom line (excluding all the one-time charges for writeoffs) it would have been regarded much more favoribly. I guess some AMD investors did not want to see AMD growing. Bottom line, if you are a long-term, conservative investor then you should just be regarding this as AMD executing their business plan. If you are a shorter-term, aggressive investor then you should be asking why AMD aren't going for a billion so they can really clean up.