Debt

Following is a summary of short-term borrowings and long-term debt:



	September 30, 2011			December 31, 2010
	(In thousands)
Debt of Amkor Technology, Inc.
Senior secured credit facilities:
$100 million revolving credit facility, LIBOR plus 2.25%-2.75%, due April 2015	$	—		$	—
Senior notes:
9.25% Senior notes, due June 2016	—			264,283
7.375% Senior notes, due May 2018	345,000			345,000
6.625% Senior notes, due June 2021, $75 million related party	400,000			—
Senior subordinated notes:
2.5% Convertible senior subordinated notes, due May 2011	—			42,579
6.0% Convertible senior subordinated notes, due April 2014, $150 million related party	250,000			250,000
Subordinated notes:
6.25% Convertible subordinated notes, due December 2013, related party	—			100,000
Debt of subsidiaries:
Working capital facility, LIBOR plus 1.7%, due January 2011	—			15,000
Working capital facility, LIBOR plus 2.8%, due January 2012 and April 2012	20,000			—
KRW 50 billion revolving credit facility, CD base interest rate plus 2.20%, due June 2012	—			—
Term loan, TIBOR plus 0.65%, due July 2011	—			2,680
Term loan, TIBOR plus 0.8%, due September 2012	12,532			19,848
Term loan, bank funding rate-linked base rate plus 1.99%, due May 2013	108,000			123,000
Term loan, bank base rate plus 0.5%, due April 2014	117,854			149,996
Term loan, bank base rate plus 2.96%, due July 2014	18,917			—
Term loan, 90-day primary commercial paper rate plus 0.835%, due April 2015	49,338			51,042
Term loan, bank funding rate-linked base rate plus 1.7%, due March 2016	4,319			—
Secured equipment and property financing	—			872
	1,325,960			1,364,300
Less: Short-term borrowings and current portion of long-term debt	(100,322		)	(150,081		)
Long-term debt (including related party)	$	1,225,638		$	1,214,219

There have been no borrowings under our senior secured revolving credit facility as of September 30, 2011; however, we have utilized $0.4 million of the available letter of credit sub-limit of $25.0 million. The borrowing base for the revolving credit facility is based on the amount of our eligible accounts receivable, which exceeded $100.0 million as of September 30, 2011. This facility includes a number of affirmative and negative covenants, which could restrict our operations. If we were to default under the first lien revolving credit facility, we would not be permitted to draw additional amounts and the banks could accelerate our obligation to pay all outstanding amounts.

In June 2011, we used the net proceeds from the issuance of the 6.625% Senior Notes due 2021 (the “2021 Notes”), discussed below, to fund the tender offer and call for redemption of the entire $264.3 million aggregate principal amount of our outstanding 9.25% Senior Notes due 2016 (the “2016 Notes”), to refinance the entire $42.6 million of our 2.50% Convertible Senior Subordinated Notes due May 2011, to pay related fees, expenses and accrued interest and for general corporate purposes. We purchased $156.7 million of the 2016 Notes in the tender offer and $107.6 million in the call. We recorded a $12.8 million loss on extinguishment related to the premiums and fees paid for the tender (approximately $7.8 million) and call (approximately $5.0 million) of the 2016 Notes and a $2.7 million charge for the write-off of the associated unamortized deferred debt issuance costs. Both charges are included in loss on debt retirement, net in our Consolidated Statement of Income for the nine months ended September 30, 2011.

In May 2011, we issued $400.0 million of the 2021 Notes. The 2021 Notes were issued at par and are senior unsecured obligations. Interest is payable semi-annually on June 1 and December 1 of each year at a rate of 6.625%, commencing on December 1, 2011. As a result of an agreement we entered into with the initial purchasers of the 2021 Notes, we filed a registration statement which became effective in September 2011, to exchange the 2021 Notes for freely tradable 2021 Notes issued by us. In connection with the issuance of the 2021 Notes, Mr. James J. Kim, our Executive Chairman of the Board of Directors and our largest stockholder, and 915 Investments, LP, an affiliate of Mr. James J. Kim (collectively, the “Kim Purchasers”) agreed to purchase $75.0 million aggregate principal amount of the 2021 Notes. In addition, we entered into a letter agreement with the Kim Purchasers pursuant to which we agreed to register the resale of the 2021 Notes held by the Kim Purchasers on a shelf registration statement upon request of the Kim Purchasers at any time after May 20, 2012. We incurred $5.9 million of debt issuance costs associated with the 2021 Notes in the nine months ended September 30, 2011.

In November 2005, we issued $100.0 million of our 6.25% Convertible Subordinated Notes due December 2013 (the “December 2013 Notes”) in a private placement to Mr. James J. Kim, our Executive Chairman of the Board of Directors, and certain Kim family members. Following a call for redemption of the entire $100.0 million aggregate principal amount of the December 2013 Notes, holders of all $100.0 million of the outstanding December 2013 Notes converted their notes into an aggregate of 13,351,131 shares of our common stock in January 2011. There was no gain or loss recorded as a result of the conversion. Forfeited accrued interest of $0.9 million and unamortized deferred debt costs of $0.4 million were included in the net carrying amount of the debt recorded to our capital accounts upon conversion.

In January 2009, Amkor Assembly & Test (Shanghai) Co, Ltd. (“AATS”), a Chinese subsidiary, entered into a $50.0 million working capital facility agreement with a Chinese bank maturing in January 2011. The facility was collateralized with certain real property and buildings in China. Principal amounts borrowed were required to be repaid within twelve months of the drawdown date and could be prepaid at any time without penalty. In January 2011, the outstanding balance of $15.0 million was repaid at maturity and AATS entered into a new $50.0 million working capital facility agreement with the same Chinese bank maturing in January 2013. The new facility bears interest at LIBOR plus 2.8% (3.23% as of September 30, 2011), which is payable in semi-annual payments. All other terms and conditions are consistent with the prior facility. At September 30, 2011, $20.0 million was outstanding under the facility. The working capital facility contains certain affirmative and negative covenants, which could restrict our operations. If we were to default on our obligations under any of these facilities, we would not be permitted to draw additional amounts, and the lenders could accelerate our obligation to pay all outstanding amounts.

In June 2011, Amkor Technology Korea, Inc., a Korean subsidiary ("ATK") entered into a KRW 50.0 billion (approximately $46 million at inception) revolving credit facility with a Korean bank with a term of 12 months. The loan bears interest at the CD base interest rate (as quoted by Korea Financial Investment Association) plus 2.20%. Principal is payable upon maturity and interest is paid monthly. The loan is collateralized with certain land, buildings and equipment located at our ATK facilities. There is no outstanding balance under this revolving credit facility as of September 30, 2011.

In July 2011, ATK entered into a $50.0 million three-year secured term loan facility with a Korean bank (the “ATK Loan”). As of September 30, 2011, we had drawn $18.9 million under the ATK Loan which bears interest at LIBOR plus 2.96% (3.25% as of September 30, 2011). As amended in October 2011, future draws on the ATK Loan will bear interest at LIBOR plus a bank determined spread throughout the three-year term. The ATK Loan is due in full upon maturity in July 2014. The ATK Loan is secured by substantially all of the land, factories and equipment located at our ATK facilities. The proceeds from the term loan will be used to fund future capital expenditures.

In April 2010, Amkor Technology Taiwan Ltd, a Taiwanese subsidiary, entered into a 1.5 billion Taiwan dollar (approximately $47 million at inception) term loan with a Taiwanese bank due April 2015. The term loan accrues interest at the 90-day commercial paper rate plus 0.835%. The interest rate at September 30, 2011, was 2.40%. The term loan is collateralized with certain land, buildings and equipment in Taiwan. In March 2011, we amended the principal repayment schedule. As a result, semiannual principal payments of 150 million Taiwan dollars (approximately $4.7 million at inception) will begin in April 2012 and the remaining 600 million Taiwan dollars (approximately $18.9 million at inception) will be due on the final maturity date.

In September 2011, ATK entered into a $50.0 million four and a half-year secured term loan facility with a Korean bank due in March 2016. As of September 30, 2011, we had drawn $4.3 million, with the remainder to be drawn throughout the four and half-year term. The loan bears interest at the bank funding rate-linked base rate plus 1.7% (5.07% as of September 30, 2011). Principal is payable on a quarterly basis for three years after a one and a half year grace period. The loan is secured by substantially all of the land, factories and equipment located at our ATK facilities. The proceeds from the term loan will be used to fund future capital expenditures.

Our secured bank debt agreements and the indentures governing our outstanding notes contain a number of affirmative and negative covenants which could restrict our operations. We were in compliance with all of our covenants as of September 30, 2011.