AMD to sell $500 mln in debt to buy back old debt

SUNNYVALE, Calif.

Chip maker Advanced Micro Devices Inc. is raising $500 million through new debt and plans to use the proceeds and cash on hand to repurchase convertible debt due 2015.

AMD is offering senior notes due 2020 in a private offering and plans to buy back $800 million of convertible senior notes carrying a 6 percent interest rate.

AMD is offering to pay $1,000 for every $1,000 of notes debt holders tender, plus accrued and unpaid interest. The offer depends on the completion of the $500 million debt deal.

The tender offer for the convertible debt expires at midnight EDT on Aug. 20.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. are the dealer managers for the tender offer.

Shares of AMD, based in Sunnyvale, Calif., fell 7 cents to $7.75 in morning trading.