AMD raises $1.48bn following notes sale

[HEXUS]

Keeping up with Intel and buying out GPU makers is an expensive business, one that's seen AMD go through a lot of cash. It's got debts to pay, but has just raised nearly $1.5bn from the sale of convertible senior notes.

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[kidzer]

I dont understand, because I'm a bit thick perhaps, what exactly have they sold?

[just_laze]

convertible senior notes, duh?

laze :-p

[Tarinder]

It's a kind of loan that has, usually, a fairly long maturity date. The loan can be turned into stock, too.

Convertible Senior Notes are sold to qualified instutional investors and attract semi-annual interest (loan). The notes can be converted into AMD stock under certain circumstances (stock).

The question is, would you buy stock in AMD, or the promise of future stock, with your institutional cash?

[DR]

It's a kind of loan that has, usually, a fairly long maturity date. The loan can be turned into stock, too.

Convertible Senior Notes are sold to qualified instutional investors and attract semi-annual interest (loan). The notes can be converted into AMD stock under certain circumstances (stock).

The question is, would you buy stock in AMD, or the promise of future stock, with your institutional cash?

Yes..... if the conversion rate was good.

[just_laze]

Is it 1 note to 1 share? I'm still confused.

So if I bought 30 notes and therefore 30 shares, for $5,000. In 3 years, when AMD is back on its feet again could I sell those notes to the value of 30 shares which at that time may be $20,000?

laze.

[DR]

Each Note has a value - and they will decide a buy value of shares - so like a share option.

So say you have 10M in Notes - and you agree you can spend this 10M on Stock in 2010 at 10$ a share (market price might be 20$) you can then execute this - and then sell them at the 20$ value instantly.... of course tax could be incurred

It's like a glorified IOU with other options

[Sinizter]

Good for them. Personally I wouldnt want long term ties to AMD. Buying now and selling just after their new processors hit the shelves would be what I would do.

But I am not an experienced investor.