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I believe we got some good news. Go to the attached link and pull up the Nov 2 press release.

http://phx.corporate-ir.net/phoenix.zhtml?c=147965&p=iro...

Holders of over 60% of the bonds are working out a deal to replace our bonds with new ones and to subordinate some other bank debt. So we end up at the top of the heap.

This casino has plenty of cash flow to service the debt. They are hopeful to retire all of their debt in the next 4-or-so years so the cash flow can service the tribe. Overall, they are being quite honorable (IMO) in that they could use their tribal rights to duck out of their obligations.

ron
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Thanks for the update, Ron! So we basically are getting our maturity date pushed out into the future? BTW, I did get the latest interest payment.
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folgore,

I read it the same way (press release plus some other blogs):
- we will not take a haircut
- we will get equal or better coupon rate
- maturity will move out 5 years

Given they have the cashflow to handle this I am not that concerned. However, my points above are really speculation.

I put a call into Don Duffy who is the contact for additional information. I am trying to get a copy or a link to the "Forebearance and Support Agreement" they reference. It should have clues as to what we will see in the "Exchange Offer" on Nov 18.

ron
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Here are some more links to news reports on the bonds. There is not much new....

http://www.northbaybusinessjournal.com/43211/river-rock-rest...

On Oct 20 they announced they were going to offer $205 of new notes due in 2018 to retire our notes. This was being underwritten by BAC and CS but they were not able to get it done in time. This could be the foundation of what we will see. There is no info on the coupon....just the maturity date.

http://www.casinoman.net/gambling-news/article/river-rock-en...

ron
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FYI, after receiving the last interest payment, that payment has now suddenly disappeared from my account! Arghh!!! How can they do that? Or is this a case of my broker finding that one of River Rock's checks bounced?
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That is typical to see a missed payment portrayed that way. Just like if you deposit a rubber check in your checking account. It shows up for a day or two, then dissappears.
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I talked with Don Duffy who is the contact for the River Rock Bonds.

He said that an Exchange Offer is being prepared for the Senior Notes (what we hold) that will make whole the current notes. That is, the new notes will have the same face and coupon value as the ones we hold. As I expected the maturity of these new bonds will be 2018.

As part of the Exchange Offer, we will be made whole on any accrued and unpaid interest as well as being offered some additional cash (the casino has about $30M in cash and has good cashflow).

He also mentioned that the terms of the new notes will be tighter than the existing ones and will stipulate that RR must buy back bonds on a regular basis so they will not all come due at once. This is good for RR as the bonds will certainly be trading below par which will make their total outlay be less that the $205 face of the Senior Notes.

Of course, until we see the Exchange Offer this is just the current plan. We should have the offer in our hands by Nov 18.

I see this as a great outcome.

ron
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Thanks for running this down, Ron! Not the best outcome, but far better than default!
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Folgore,

I think this is an excellent outcome given the situation. The forced buy-back is a big thing to me. They have to use 90% of their FCF if EBITDA over $50M and 100% if under $50M to buy back bonds. They have been at about 54-55M EBITDA over the last few years.

The casino expansion plans have been dropped so FCF should be increasing but I would only be guessing what they might be. Every bit of debt they retire will improve their financial position.

ron
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One definitely has to sympathize with them for trying to do the right thing. From what I've read in the past several weeks, though, they are not in the most favorable situation. I've read that their location is a bit remote which impacts traffic. Further, the economic situation in California may be a drag as well. I hope things are looking better in 2018 than they do now.
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"Of course, until we see the Exchange Offer this is just the current plan. We should have the offer in our hands by Nov 18."




Anyone have that offer, in his or her hands, yet? My brokerage service, as of yesterday, had no more information on this matter than I.
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I don't have it either and have looked everywhere I know to find it. I may call Don Duffy if I don't hear something by Tuesday.

ron
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Please see my comments here on the River Rock bond exchange offer:

http://boards.fool.com/i-made-a-lot-of-money-on-river-rock-b...

I want to know if anyone else selected the muni bond and realizes that some brain surgeon has coded the bond as a 144A offering, rendering it effectively untradeable and illegal for a retail investor to even own.
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