AMD offers market debt to get itself out of…debt

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AMD announced today that they intend to offer $1.5B of convertible senior notes to big institutional buyers. According to the release

AMD logoAMD expects to use the net proceeds of the offering, together with available cash, to repay in full the outstanding balance of the term loan AMD entered into with Morgan Stanley Senior Funding, Inc. in October 2006. If the initial purchaser exercises its over-allotment option, AMD expects to use the additional net proceeds for general corporate purposes, including working capital and capital expenditures.

I guess if you’re going to announce you need to borrow more money to pay off the money you borrowed you may as well do it on a new product launch day. [Note: I originally reported this as happening on Sep 10. Turns out it was Aug .]

In the unlikely event that you’re a giant institutional investor reading, the notes are due in 2012 and pay 5.57%. Financial details here.