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Chip manufacturing giant AMD is preparing a debt offering of about $4 billion to $5 billion in what would be its largest investment-grade bond sale ever.
The chipmaker aims to acquire fresh cash for its AI expansion from this sale, while adding to the increasing pile of debt in the tech sector.
Sale in four offerings, maturities up to 10 years
The bond sale is positioned in four separate note offerings, with different terms running from three to 10 years. Early pricing on the notes dated to the furthest time of maturity yields about 1.15 percentage points more than US Treasuries.
No final decision has been made on the actual amounts AMD plans to actually raise, with the number still capable of moving based on investor demand.
In a filing with the U.S. SEC, AMD said the money would go toward general corporate purposes, a category that can include paying existing debt. The company has about $875 million in bonds set to be due next month.
Debt offering could double AMD debt load
Reports claim that AMD has almost $3.25 billion in long-term debt currently, a figure spread across several senior note series. Assuming the proposed debt offering goes ahead at the maximum price of the expected range, the tech giant could accrue debt of more than double what it already owes.
AMD is not the only top tech company involved in borrowing to fund itself. Nvidia and Alphabet have both tapped into the debt markets recently to bankroll their AI ambitions, and AMD now aims to join that line. AI compute demand continues to overrun available supply, with chipmakers spending heavily to keep up with this demand.
The company has also been closing the gap on Nvidia with its MI-series accelerators, and is now chasing contracts that used to be Nvidia’s alone. It has also signed cooperation deals with Anthropic and Microsoft, and separately committed as much as $5 billion to Anthropic, the Claude maker.
Barclays, Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo are reportedly managing the bond sale.
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