TLDR
- AMD is launching a bond offering that could raise between $4 billion and $5 billion.
- The debt is split into four tranches with maturities of 3, 5, 7, and 10 years.
- Proceeds will go toward general corporate purposes, including possible debt repayment.
- AMD has $875 million in bonds maturing next month.
- The move follows AMD deals with Anthropic and Microsoft to expand its AI chip business.
AMD launched a major bond sale on Thursday, looking to raise as much as $5 billion in what could be its biggest-ever investment-grade debt offering.
Advanced Micro Devices, Inc., AMD
The chipmaker filed with the U.S. Securities and Exchange Commission earlier in the day in connection with the deal, though the filing did not include specific terms.
AMD is selling senior unsecured notes in four tranches, with maturities in 2029, 2031, 2033, and 2036. Initial price talk was set at around 70 basis points over U.S. Treasuries for the 3-year notes, 90 basis points for the 5-year, 100 basis points for the 7-year, and 115 basis points for the 10-year debt.
AMD stock was up around 1.8% on Thursday.
The final size of the offering has not been confirmed and could shift depending on investor demand.
The bonds are expected to settle on August 17.
AI Deals Drive Spending Push
The debt raise comes as AMD ramps up capital spending to meet rising demand for AI computing. The company recently struck deals with Anthropic and Microsoft to extend the reach of its AI chips.
As part of the Anthropic agreement, AMD has committed to invest as much as $5 billion in the Claude chatbot maker.
AMD said it plans to use the bond proceeds for general corporate purposes, which may include repaying existing debt. The company has $875 million in bonds maturing next month.
Banks Leading the Deal
Bank of America, JPMorgan, Barclays, and Wells Fargo are leading the offering, according to the term sheet.
Barclays, Citigroup, Morgan Stanley, and others are also managing the sale, according to separate sources.
JPMorgan and Citi declined to comment. AMD and the remaining banks did not immediately respond to requests for comment.
The bond sale adds AMD to a growing list of tech companies tapping debt markets to fund AI-related spending.
AMD’s four-tranche structure gives investors options across the yield curve, from short-dated notes to a 10-year tenor.
The 10-year tranche, the longest in the deal, is priced at an initial yield premium of 115 basis points over Treasuries.
No final pricing had been confirmed as of Thursday afternoon.
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