AMD Announces Closing of $500 Million Secured Revolving Line of Credit

[Xzibit]

Just remember, this is both a credit line and a secured loan. A credit line means that the company isn't taking out a $500 million loan; the company has the option to take out up to $500 million in loan. Also, it's a secured loan, so it's much less risky than an unsecured loan or a stock purchase. If Bank of America really believed in AMD, it would take stock in the company or make an unsecured loan; a secured loan is just a hedge against a higher risk investment.

FYI

Bank Of America holds 1,224,904 shares of AMD

 

[Slomo4shO]

Global wealth has increased 112 percent since 2000 to reach a new all-time high of USD 241 trillion...
global will rise by nearly 40% over the next five years, reaching USD 334 trillion by 2018.

Global wealth continues to increase as the total assets in the world remains static

 

[The Von Matrices]

FYI

Bank Of America holds 1,224,904 shares of AMD

Thanks for the information. At current prices that is worth less than $5 million, so I'd say Bank of America doesn't have enough confidence in AMD to provide an unsecured investment 100 times larger.

 

[Xzibit]

Thanks for the information. At current prices that is worth less than $5 million, so I'd say Bank of America doesn't have enough confidence in AMD to provide an unsecured investment 100 times larger.

Still confused on your position with Bank of America.

AMD today announced that the company and its subsidiary, AMD International Sales & Service, Ltd. (collectively, the "Borrowers&quot, have entered into a loan and security agreement for a principal amount up to $500 million (the "Secured Revolving Line of Credit&quot with a group of lenders and Bank of America, N.A. acting as agent for the lenders.

You want BofA to ask for more money from the lenders ?

 

[The Von Matrices]

Still confused on your position with Bank of America.

You want BofA to ask for more money from the lenders ?

My comment is that BoA providing secured loans rather than investing in the company; it really has nothing to do with BoA or any bank but rather toward AMD's financial status. Companies with good financial outlooks can get their money through stock investments (issuing new shares). Acquiring secured debt is not a desirable choice for any publicly traded company.

 

[Xzibit]

My comment is that BoA providing secured loans rather than investing in the company; it really has nothing to do with BoA or any bank but rather toward AMD's financial status. Companies with good financial outlooks can get their money through stock investments (issuing new shares); acquiring secured debt is not a desirable choice for any publicly traded company.

If Bank of America really believed in AMD, it would take stock in the company or make an unsecured loan; a secured loan is just a hedge against a higher risk investment.

I'd say Bank of America doesn't have enough confidence in AMD to provide an unsecured investment 100 times larger.

Seamed you were blaming BofA for not having enough confidence to loan more than $500mil when they were not even the people loaning the money.

Why would a company issue shares to raise 1/5th there capital ? This is much better.

 

[The Von Matrices]

Seamed you were blaming BofA for not having enough confidence to loan more than $500mil when they were not even the people loaning the money.

You are correct. I misinterpreted the article. The unnamed lenders are providing the money and BoA is only completing the paperwork.

Why would a company issue shares to raise 1/5th there capital ? This is much better.

What is a better way for a public company to raise more capital than issuing shares? Isn't that the whole reason for taking a company public? As long as your company isn't in default you are never required to pay out the shares. (Technically the shareholders can force the company to buy back shares, but it never happens unless the company is making a profit or has a large amount of cash on hand). The problem is that AMD's stock price is already so diluted that it can't afford to issue more shares; they would never all sell based on the health of the company. So therefore the company has to resort to a more expensive loan.

 

[Steevo]

You are correct. I misinterpreted the article. The unnamed lenders are providing the money and BoA is only completing the paperwork.



What is a better way for a public company to raise more capital than issuing shares? Isn't that the whole reason for taking a company public? As long as your company isn't in default you are never required to pay out the shares. (Technically the shareholders can force the company to buy back shares, but it never happens unless the company is making a profit or has a large amount of cash on hand). The problem is that AMD's stock price is already so diluted that it can't afford to issue more shares; they would never all sell based on the health of the company. So therefore the company has to resort to a more expensive loan.

A revolving line of credit is what most companies use. The interest gets written off, and they use the cash between credits and debits to their primary operating accounts for things like payroll and other day to day business expenses.

I have a revolving line of credit with my checking account. Perhaps I am a bad business person and therefore I shouldn't sell GPU's......OH THE SHAME!!!! Doing business like 90% of other businesses in the world!!!

 

[redeye]

And to think that Apple just dropped 578 million on the synthetic sapphire plant that GT advanced technologies is building and operating for Apple. (the loan will be repaid by GT advanced technologies)...

 

[Steevo]

And to think that Apple just dropped 578 million on the synthetic sapphire plant that GT advanced technologies is building and operating for Apple. (the loan will be repaid by GT advanced technologies)...

I guess if AMD were OK with using slave labor in a company whose workers try and commit suicide at work they would have more money like apple too.

 

[DaedalusHelios]

I guess if AMD were OK with using slave labor in a company whose workers try and commit suicide at work they would have more money like apple too.

Where the social safety net is quite literal.