By Paul Deckelman
New York, Aug. 6 - Advanced Micro Devices, Inc. priced an upsized $500 million offering (Ba3/BB-) of 10-year notes on Monday, high-yield market sources said.
The Sunnyvale, Calif.-based semiconductor company's quick-to-market issue was upsized from an originally announced $300 million and priced at par to yield 7½%, at the tight end of pre-deal market price talk envisioning a yield in a 7½%-to-7 ¾% range.
The deal was brought to market by joint bookrunning managers J.P. Morgan Securities LLC and Bank of America Merrill Lynch.
The paper is being sold to qualified institutional investors under Rule 144A and Regulation S with registration rights.
The notes are not callable, other than via a make-whole call at 50 basis points over Treasuries as well as a standard equity clawback, allowing up to 35% of the issue to be redeemed in the first three years using the proceeds of any equity sale.
AMD said that it plans to use the estimated $491 million of net proceeds it expects to garner from the bond deal, after deducting the initial purchasers' discounts and estimated offering expenses, for general corporate purposes and working capital.
The company said that these uses may include the repayment or repurchase of some or all of its outstanding 5.75% convertible senior notes that are scheduled to come due on Aug. 15 and the repayment or repurchase of some or all of its outstanding 6% convertible senior notes due 2015.
AMD said it could also use some of the proceeds for cash payments to GlobalFoundries Inc. related to the 28nm product limited waiver of exclusivity. The Malpitas, Calif.-based semiconductor manufacturing company was formerly AMD's manufacturing arm until AMD divested it in stages over the past several years, selling its final ownership stake earlier this year.
AMD also said it could use some of the proceeds for potential strategic transactions.
| Issuer: | Advanced Micro Devices, Inc.
|
| Amount: | $500 million, upsized from $300 million
|
| Maturity: | Aug. 15, 2022
|
| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC and Bank of America Merrill Lynch.
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 594 bps vs 1¾% Treasury due May 15, 2022
|
| Call protection: | Non-callable, except for make-whole call at T+50 bps
|
| Equity clawback | Up to 35% at 107.5, through Aug. 15 2015
|
| Trade date: | Aug. 6
|
| Settlement date: | Aug. 15
|
| Ratings: | Moody's: Ba3
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| Standard & Poor's: BB-
|
| Distribution: | Rule 144A/Reg. S with registration rights
|
| Price talk: | 7½% to 7¾%
|
| Marketing: | Quick to market
|
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