AMD Launches Up To $5 Billion Debt Offering As AI Investment Accelerates
Advanced Micro Devices launched a four-part debt offering on Thursday that could raise between $4 billion and $5 billion, according to a source and terms reviewed by Reuters.
The chipmaker is seeking greater funding flexibility as technology companies increase capital raising to support investments linked to artificial intelligence.
The offering includes senior unsecured notes maturing in 2029, 2031, 2033 and 2036. Initial price discussions were set at about 70 basis points over US Treasuries for the three-year notes, 90 basis points for the five-year tranche, 100 basis points for the seven-year notes and 115 basis points for the 10-year debt.
AMD said it plans to use the proceeds for general corporate purposes, which could include repaying existing debt.
“AMD is committed to maintaining its strong financial balance sheet and we have strong investment grade ratings,” an AMD spokesperson said. The company also said it intended to use net proceeds from the offering for general corporate purposes.
AMD Seeks Funding Flexibility
The debt offering highlights how semiconductor companies are increasingly turning to capital markets as they fund AI-related investments, data-centre expansion and manufacturing projects.
Earlier this week, Intel raised $20 billion through an upsized stock offering. The company plans to use the proceeds to support its contract chipmaking ambitions.
AMD also filed with the US Securities and Exchange Commission on Thursday in connection with the debt offering. However, the filing did not disclose the specific terms of the deal.
Bank of America, JPMorgan, Barclays and Wells Fargo are leading the debt sale, according to the term sheet. The bonds are expected to settle on August 17.
AI And Data-Centre Demand Supports AMD
The debt sale comes as AMD expands its AI and data-centre businesses. The company competes with Nvidia while also challenging Intel across several processor markets.
AI-focused demand has become an important driver of investment across the semiconductor industry. As a result, chipmakers are seeking additional capital to support expansion and future projects.
Earlier this month, AMD forecast third-quarter revenue above Wall Street estimates. The company also said data-centre sales would more than double by 2027, underscoring strong demand for its AI-focused chips.
The new debt offering gives AMD additional financial flexibility as it continues expanding those businesses. Meanwhile, the company said its balance-sheet strength and investment-grade ratings remain priorities.
With inputs from Reuters