Rambus Denies Bond Default
Unlike Vitesse, which has only $30 million in cash on its balance sheet, Rambus had roughly $416 million in cash, cash equivalents and marketable securities at the end of June. Rambus says it has adequate financial resources to pay any unpaid principal and interest on the notes in the event of a default.
Additionally, the Los Altos, Calif., company said its recent failure to file its quarterly earnings report with the trustee did not violate the terms of the bonds. According to Rambus, the company is required to give the trustee copies of reports within 15 days after they have been filed with the SEC.
That, contends Rambus, implies that the trustee's right to receive financial reports is contingent upon the SEC first receiving the filings.
"Since the company's Form 10-Q for the quarter ended June 30, 2006 has not been filed with the SEC, the company is under no obligation to file it with the trustee," read a statement by Rambus.Rambus also said it would have until Nov. 7 to rectify the situation by filing its report. U.S. Bank contends that Rambus has until Oct. 17 to stave off an official event of default. In the event of default, Rambus said that all $160 million in principal would be due immediately, as well as any additional interest, which accrues at a rate of 2% per year.
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