News of the offering comes after AMD posted a stinging first-quarter loss last Thursday of $611 million, or $1.11 per share, down from a profit of $184.5 million, or 38 cents per share, in the year-ago period. Sales sank to $1.23 billion from $1.33 billion.Additionally, Standard & Poor's downgraded AMD's credit rating to "B" - this basically means that the extra debt will be more expensive for AMD.
The loss left AMD with just $1.167 billion in cash, a worryingly low level given its heavy debt load after its acquisition of graphics chip specialist ATI in a $5.4 billion deal last year. The offering may also cool speculation that there could be a private-equity buyout of AMD.
AMD announced it will sell $1.8 billion worth of convertible notes, giving buyers a 30-day option to buy up to an additional $400 million in notes to cover any over-allotments.
AMD desperate for more cash
Posted on Tuesday, Apr 24 2007 @ 10:07 CEST by Thomas De Maesschalck