AMD to raise $1.5 billion in debt financing

Senior debt notes will help AMD to pay off loan for ATI.

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By  Mark Sutton Published  August 13, 2007

AMD has announced plans to raise $1.5 billion in debt financing, to improve liquidity and strengthen the company's financial position.

The net proceeds will be used to repay in full the outstanding balance of the loan AMD secured from Morgan Stanley Senior Funding, which in part funded the acquisition of ATI. AMD bought the graphics chip manufacturer in October last year, for around $5.4 billion. Additional net proceeds will be used for general corporate purposes, including working capital and capital expenditures.

The deal marks the third round of debt finance raised by AMD this year. According to Dow Jones, John Dryden, an analyst with Charter Equity Research predicted that the cash should help AMD to the end of 2007, but that more financing would be likely in 2008, due to AMD's high cash burn rate.

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