Lehman lifeline was critical to AMD

Yahoo News has an article on how the financial crisis could affect the computer industry. The article explains AMD got a $1.5 billion loan from Lehman Brothers, the investment bank now in bankruptcy, in August 2007. The current state of the market makes it harder for healthy firms to raise money and could make it nearly impossible to raise new cash for debt-loaded companies such as AMD:

The Lehman-AMD deal is a snapshot of a common type of partnership that could be harder to come by with Lehman's bankruptcy and the disintegration or consolidation of other banks.

In AMD's case, Lehman's problems won't affect the Sunnyvale, Calif.-based company's balance sheet, which at the end of June showed AMD holding about $1.6 billion in cash while carrying $5.3 billion in debt.

That's because AMD has already spent the proceeds, and its debt offering was sold off by Lehman to other banks or held by its subsidiaries that are now being sold to other firms.

There were no clauses that required anything further of AMD other than paying interest on the investment and fulfilling the contracts when they reach their maturity date.