TAKKO

All,

Please find attached our analysis of Takko. We are going short 4% of NAV.
Our model shows that with one more quarter of recent performance (and it looks that way) Takko will have to draw on its RCF so heavily, that it will likely have too little liquidity to conduct orderly purchases ahead of Easter. The minimum EBITDA covenant is equally tight.
The SSNs yield around 13% and Takko only report on May 28th. So our strategy is both expensive and not without risk. We think that if Takko outperforms the bonds will trade to 10%YTW - 7 points in the wrong direction. But if it underperforms we see the next two trading levels at 65c/E and 50c/E.


Wolfgang