Item 1.01
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Entry into a Material Definitive Agreement.
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Completion of Concurrent Public
Offerings of Common Stock and Convertible Senior Notes.
On September 14, 2016, Advanced Micro Devices, Inc. (the
Company
) completed its registered underwritten public offering of 100 million shares (the
Shares
) of the Companys common stock, par value $0.01 per share (
Common Stock
), at a public offering price of $6.00 per share, pursuant to an underwriting agreement (the
Equity
Underwriting Agreement
) with J.P. Morgan Securities LLC, Barclays Capital Inc. and Credit Suisse Securities (USA) LLC (collectively, the
Representatives
), as representatives of the several underwriters named
therein (the
Common Stock Offering
), and the concurrent registered underwritten public offering of $700 million aggregate principal amount of the Companys 2.125% convertible senior notes due 2026 (the
Notes
) pursuant to an underwriting agreement (the
Notes Underwriting Agreement
and, together with the Equity Underwriting Agreement, the
Underwriting Agreements
) with J.P.
Morgan Securities LLC, Barclays Capital Inc. and Credit Suisse Securities (USA) LLC, as representatives of the several underwriters named therein (the
Notes Offering
).
The Company also granted to the Equity Underwriters (as defined below) a 30-day option to purchase up to 15 million additional shares of
Common Stock. In addition, the Company granted a 30-day option to the Notes Underwriters (as defined below) to purchase up to an additional $105 million aggregate principal amount of Notes, solely to cover over-allotments.
The Shares and the Notes (and the shares of Common Stock issuable upon conversion of the Notes) have been registered pursuant to the
Registration Statement on Form S-3 (Registration Statement No. 333-213513) (the
Registration Statement
) filed with the Securities and Exchange Commission (the
Commission
) under the Securities Act
of 1933, as amended (the
Act
), including the prospectus supplements filed by the Company with the Commission pursuant to Rule 424(b)(5) under the Act, in each case, dated September 8, 2016 (each, a
Prospectus
Supplement
and together, the
Prospectus Supplements
), to the prospectus contained in the Registration Statement, dated September 6, 2016.
The resulting aggregate net proceeds to the Company from the Common Stock Offering were approximately $580.5 million, after deducting
underwriting discounts totaling approximately $19.5 million and estimated expenses. The resulting aggregate net proceeds to the Company from the Notes Offering were approximately $680.0 million, after deducting underwriting discounts totaling
approximately $19.3 million and estimated expenses.
Base Indenture and Supplemental Indenture
. The Company issued the Notes under
an indenture dated as of September 14, 2016 (the
Base Indenture
), between the Company and Wells Fargo Bank, National Association, as trustee (the
Trustee
), as supplemented by the first supplemental
indenture dated as of September 14, 2016, between the Company and the Trustee (the
Supplemental Indenture
and, together with the Base Indenture, the
Indenture
).
The Notes bear interest at a rate of 2.125% per year, payable semi-annually in arrears, on March 1 and September 1 of each year,
commencing on March 1, 2017. The Notes are general unsecured senior obligations of the Company and (i) rank equal in right of payment with the Companys other senior unsecured indebtedness, (ii) rank senior in right of payment to any
indebtedness that is contractually subordinated to the Notes, (iii) are effectively subordinated to all of the Companys existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and (iv)
are structurally subordinated in right of payment to the claims of the Companys subsidiaries creditors (including trade creditors).
The Notes will mature on September 1, 2026 (the
Maturity Date
), unless earlier redeemed or repurchased by the
Company or converted.
Prior to the close of business on the business day immediately preceding June 1, 2026, the Notes will be
convertible only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended on September 30, 2016 (and only during such calendar quarter), if the last reported sale price of the common stock for at
least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each
applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the
Measurement Period
) in which the trading price per $1,000 principal amount of Notes for each trading day of
the measurement period was less than 98% of the product of the last reported sale price of the Companys common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after June
1, 2026 until the close of business on the business day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case
may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Companys election.
The
initial conversion rate of 125.0031 shares of Common Stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $8.00 per share of Common Stock. The conversion rate is subject to adjustment in
certain circumstances.
Upon the occurrence of a fundamental change (as defined in the Indenture) involving the Company, holders of the
Notes may require the Company to repurchase all or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase
date.
The Company may not redeem the Notes prior to the Maturity Date and no sinking fund
is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically.
The Indenture
contains customary terms and covenants and events of default. If an event of default (as defined therein) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the Notes then
outstanding by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest on all the Notes to be due and payable. In the case of an event of
default arising out of certain bankruptcy or insolvency events (as set forth in the Indenture), 100% of the principal of and accrued and unpaid interest on the Notes will automatically become due and payable.
A copy of the Base Indenture is filed as Exhibit 4.1 to this Current Report and is incorporated herein by reference. A copy of the
Supplemental Indenture, including the form of Note, is filed as Exhibit 4.2 to this Current Report and is incorporated herein by reference. The description of the Notes and the Indenture in this Current Report is a summary and is qualified in its
entirety by the terms of the Indenture and the form of Note included therein. The Base Indenture, the Supplemental Indenture and the Form of Note are also filed with reference to, and are hereby incorporated by reference into, the Registration
Statement.