http://www.pressdemocrat.com/article/20120328/BUSINESS/12032...Basically what persistone stated two weeks ago about River Rock "going dark" and not providing regular financial data to the feds. The article points out that because of this, rating agencies like Moody's and S&P will no longer rate them, making it difficult to raise money for some expansion projects they were planning prior to the start of the recession in 2008.Right now, they're just trying to survive the recession. When the California economy really begins to look up, however, I think they'll probably resume giving regular data to the gov't in order to pave the way for future borrowing.
I just don't get why they did this. Was it to save money on lawyers? Based on the lengthy disclosures they are putting out anyway, on their own web site, it doesn't look like they saved anything on service fees.All this action does is increase the perception that River Rock - like most Indian casinos - is not transparent and plays by any set of rules it wants to make up.At least the bonds didn't pancake on the announcement, but I fail to understand how this will do anything to advance their objectives to raise money in future.
I just don't get why they did this. Was it to save money on lawyers? Based on the lengthy disclosures they are putting out anyway, on their own web site, it doesn't look like they saved anything on service fees.Not a good way to run a business; I'll definitely avoid Indian Casinos in the future.So, have you seen anything regarding their 2011 annual report that they were supposed to release at the end of March?
I read through the document from the River Rock investor login today. I didn't find anything dramatically negative. It looks to me like the document was written with as much effort as an SEC compliant document would be. The avoidance of SEC must have to do with not wanting to be supervised, and that is annoying.The bonds did sell off, but the sell off is on low volumes. It looks like retail investors in a panic, but any large holders are keeping their cool.I'm very interested to see how they actually implement this requirement to buy back debt with excess EBITDA.
Perhaps by "going dark," RR intends to take advantage of panicked investors and buy back their bonds at a big discount. Then a couple of years from now -- a couple years before their current bonds mature -- they'll reopen ties with the SEC to pave the way for a new bond offering with the expectation that there will be no investors out there who are unaware of their negative history.For myself, I believe it's all going to come down to what they do on that first coupon payment in May. If they pay up, it will be clear to bondholders that remain that the bonds still have value and the sell-off will stop. I bought very close to par, so I won't be quick to sell; I'm waiting for May to get that first coupon payment which I believe they won't shirk on.
Your theory isn't bad. Perhaps since they are required to buy back their own paper with excess cash flow, they are incentivized to traumatize their bondholders. :) And it's working. :) This is some ugly paper we are holding.I guess if they get down near 50% of par I have to buy some more. But short of that I'll hang on for a while. I'm most interested to see how price changes after they release next report and buy back bonds.
I guess if they get down near 50% of par I have to buy some more. I thought of that too, but haven't really seen their name come up in any of my bond search engines. Perhaps that just indicates that when their bonds are put on the market they get snapped up quickly, either by RR or perhaps by the institutional investors.I bet if it goes down much further, we'll get some kind of offer. A couple of years ago, I got an offer from Ford on one of my bonds at something like .30 on the dollar. I rejected the offer and, of course, the Ford bond prices recovered and then some.
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