Press Taken to Task for Milken Coverage

Like many other financial writers, Alan Sloan doesn’t know what he’s talking about in “The Two Faces of Michael Milken” (March 15). Unfortunately, he constitutes but one voice in a Greek chorus of journalists that have waged an unprecedented campaign to bury Milken and the high-yield market.

Sloan writes: “ . . . what crashed it (the market) was the massive wave of defaults, which has crested but still continues.” Naysayers like Sloan always deal with the exception rather than the rule.

The $60-billion resurgence of the market in 1991 is downplayed, while the relatively few defaults are emphasized. Defaulting bonds have nothing to do with market highs and lows. But flooding the market with underpriced bonds does.

Sloan, who has made a virtual crusade out of bashing one of the most successful deals of the century, wrote: “Milken says he said the (R. J. Reynolds) leveraged buyout needed more cash and less debt. But when I wrote just that in January of 1989, Milken told me that I didn’t know what I was talking about.”

While I can’t speak for what Michael Milken allegedly said to Sloan, I do know what he said to me and others at the time of the RJR deal. I was still at Drexel as the head of syndication and worked directly on this transaction.

Mike was adamant in his view that RJR should issue more equity--that the environment was no longer appropriate for high-coupon, double-digit debt. He said this privately and publicly, including in speeches to institutional investors.

I am sick and tired of the “tabloidization” of the American press, a phenomenon that has certainly characterized the coverage of Milken’s case.

LORRAINE SPURGE

Beverly Hills