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Gold/Mining/Energy : Royal Oak-RYO

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To: Elizabeth Andrews who wrote (790)	3/22/1998 9:31:00 AM
From: Thomas P. Talbot	Read Replies (1) of 1706

The statement that they were not in default was IN RESPONSE to an unauthored internet piece from DLJ. So they had to respond. If in fact they were not in default do you expect them to say they are or wait until the fact. The internet piece was put out by DLJ which reportedly short the unsecured bonds. RYO would not have stated they were "not in default" if they did not have to respond to something. Surely you could not expect them to state that they arent in default but soon will be. I frankly don't blame DLJ for being nervous,as someone pointed out on Yahoo, that the unsecured bonds have held at 62 even with the announcement of the technical default. This person's junk bond acquaintance stated that if BR is imminent the BONDS always tank. The Bond people know more than the equity people. Since Peggy is negotiating with the Bond people the firmness in price may be the most indicative sign of what is brewing. Its an independent irrefutable fact that the bonds are holding firm and the company is negotiating with bondholders. A Chap 11 BR could be long and drawn out with no interest payments and much uncertainty and in who's interest? If that was going to happen wouldn't you sell your unsecured subordinated bonds?

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