AMD Just Secured a $500 Million Line of Credit

By Jane McEntegart
published

AMD gets a boost.

AMD has been struggling financially thanks to a slowing PC industry. Today, AMD announced that it had secured a loan of half a billion dollars from a group of lenders. Bank of America is acting as agent for the lenders. This secured revolving line of credit will mature five years from now, on November 12, 2018. Speaking in a statement released today, AMD CFO Devinder Kumar said the loan would offer the financial flexibility AMD needs.

"We have made significant progress during the last year strengthening our capital structure to support our strategic growth plans," said Devinder Kumar, AMD senior vice president and chief financial officer. "We expect to end the fourth quarter of 2013 with cash, cash equivalents and marketable securities, including long-term marketable securities, balances of approximately $1.2 billion and remain committed to maintaining ongoing balances of approximately $1.1 billion, our target optimal level. This secured revolving line of credit provides AMD with greater financial flexibility as we continue transforming AMD for growth across a more diverse set of markets."

AMD has, over the last year, made attempts to reduce investments and capital in non-core parts of the business. The company in March entered into a transaction that saw the company sell and lease back its Austin, Texas campus to Southwest Parkway. That deal was said to generate approximately $164 million in cash for the chip maker. Then, in September, AMD did the same with its Singapore facility. That generated proceeds of up to $46 million (net of all fees).

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Jane McEntegart
25 Comments Comment from the forums
  • eklipz330
    got to give them a hand for trying. hopefully within the next few years, they will become the primary choice for computer builds. should wake up intel too
    Reply
  • deftonian
    I can't help but like AMD for being a little engine that could. They've stuck through the tough times and continue to release products at lower price points than it's competitors. They offer great incentives (bundles) and don't really back down from a fight (Intel, Nvidia) even though they're smaller. They have a lot of fight in them so gotta give props. I hope the next gen consoles give them the boost they need. I'd love to see them make more money to invest in product development. I'd like to see them compete better against Intel. They already do a nice job competing against Nvidia.
    Reply
  • back_by_demand
    They don't need to focus too heavily on PC, seeing as they are the CPU/GPU in both PS4 and XB1, all is good in the green house
    Reply
  • internetlad
    I'm conflicted, one one hand Intel, while not being an inherently flawed company, hasn't been making any great strides in processor performance recently, on the other hand they haven't really needed to, the bottlenecks lie elsewhere. I do admire the increases in overall efficiency and power consumption, but the jump from Ivy to Haswell was just piss-poor.

    I do wish AMD were competitive again, but I have no reason to dislike Intel other than the recent stagnation which, in the long run, really isn't a huge deal.
    Reply
  • sykozis
    You don't have to dislike Intel, to like AMD or want AMD to be more competitive. Intel fans should be praying that AMD figures out how to compete again. Intel puts out their best products when they have competition.
    Reply
  • eklipz330
    haswell was designed for mobile solutions mostly... they shine in the battery department. anyone with ivybridge or sandybridge is good for at least another generation, maybe even more
    Reply
  • DRosencraft
    I agree with deftonian that AMD is one heck of a great story of a smaller company toughing it out and pushing through great, competitive products. My only worry is that sometimes having too much money leads to bad decision making. When you are a smaller company a lot of money and a bad decision can ruin you quickly. A half-billion is a decently large credit-line. Just use it wisely and don't think you're superman all of a sudden, AMD. Too many of us are hoping you stay level-headed.
    Reply
  • Calculatron
    AMD needs every edge it can get. I give it major props for being able to do what it manages to do, with the resources it has. They really are the underdogs of this fight. I hope that this pans out well for them.
    Reply
  • iam2thecrowe
    11923447 said:
    They've stuck through the tough times and continue to release products at lower price points than it's competitors. They offer great incentives (bundles)

    maybe these are the reasons they need to take out a loan. they could charge what they like for the 290 and 290x, they chose to take a profit hit for market share. that will only pay off if these products don't fail, and with the amount of heat they generate, i hope it doesn't end up leaving a taste of poor quality in consumers mouths. AMD have put out some good products, but i still question quality when they are constantly undercutting competitors prices.
    Reply
  • maddad
    If you are selling enough quantity to gain market share; then you are not taking a profit hit. I question why the other companies are selling their products at such high prices when AMD is able to make a good product and sell it at such competitive prices. I have been all AMD for years now. It would be expensive for me to change everything over to Intel and Nvidia at this point. Facte in that my PC does everything I need it to do very well and I don't need to change brands. I would like to see AMD correct some things like the high temperature at which their processors and video cards operate. But for me these are minor issues since I am not a hard core gamer.
    Reply