Advanced Micro Devices, Inc. (NASDAQ:AMD) announced the pricing of an upsized public offering of $700 million aggregate principal amount of its 2.125% Convertible Senior Notes due 2026 (the “New Notes”). The offering of the New Notes was upsized from an originally announced amount of $450 million. AMD also announced the pricing of a public offering of shares of its common stock (the “Shares”) of $600 million at a price of $6.00 per share. AMD expects the transactions to close on or around Sept. 14, 2016, subject to customary closing conditions. AMD also granted the underwriters a 30-day option to purchase up to 15 million additional Shares at the public offering price and up to $105 million principal amount of additional New Notes. AMD estimates that the net proceeds from the issuance and sale of the Shares and the New Notes (the “Net Proceeds”) will be approximately $1.26 billion after deducting the underwriters’ discounts and estimated offering expenses.
The New Notes will be unsecured, unsubordinated obligations of AMD, and interest will be payable semi-annually at a rate of 2.125% per year. The initial conversion rate of the New Notes is 125.0031 shares of common stock per $1,000 principal amount of the New Notes (which is equivalent to an initial conversion price of approximately$8.00 per share). Upon conversion, AMD will pay or deliver, as the case may be, cash, shares of common stock of AMD or a combination of cash and shares of common stock of AMD, at its election.
AMD intends to use the Net Proceeds received from the offerings to repay its borrowings under its credit facility and/or to purchase its outstanding senior notes. After the completion of a tender offer for its outstanding senior notes, AMD has the option, but not the obligation, to call any and all of the untendered 7.75% Senior Notes due 2020 with any remaining net proceeds. AMD will use any remaining net proceeds for capital expenditures, working capital and other general corporate purposes. (Original Source)
Shares of Advanced Micro Devices closed yesterday at $6.22, down $0.62 or -8.99%. AMD has a 1-year high of $8 and a 1-year low of $1.65. The stock’s 50-day moving average is $6.92 and its 200-day moving average is $4.44.
On the ratings front, AMD has been the subject of a number of recent research reports. In a report issued on September 7, Wells Fargo analyst David Wong reiterated a Buy rating on AMD. Separately, on September 6, Jefferies’ Mark Lipacis reiterated a Buy rating on the stock.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Wong and Mark Lipacis have a total average return of 19.6% and 21.1% respectively. Wong has a success rate of 76.5% and is ranked #52 out of 4147 analysts, while Lipacis has a success rate of 75% and is ranked #11.
TipRanks analytics exhibits AMD as a Hold with 5 analysts issuing a Hold rating, 4 maintaining a Buy rating, and 6 upholding a Sell rating for shares of AMD. The consensus target price for AMD is $5.24, marking a 16% downside from current prices.
Advanced Micro Devices, Inc. is a global semiconductor company that develops computer processors and related technologies for business and consumer markets. It design and integrate technology for intelligent devices, including personal computers, game consoles and cloud servers. The company operates through the following segments: Computing and Graphics, and Enterprise, Embedded and Semi-Custom. The Computing and Graphics segment includes desktop, notebook processors, chipsets, discrete GPUs and professional graphics. The Enterprise, Embedded and Semi-Custom segment includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties.