Almaviva - Cautious on RFI contract despite recent rally

All,

We have updated our model here.

We remain on the sidelines of AlmaViva as the recent rally to 90% leaves the bonds not attractive enough to compensate for the potential downside gap associated with a loss of the   RFI railways contract. As per our original thesis, we had planned to exit our initial position before the auction of this contract, and reentering the name now leaves too little upside before Q4.  There will be continued press coverage surrounding the closure (or otherwise) of the Palermo CRM site, but bondholders should look through this and any weakness on this news front should be capitalised on.

Happy to discuss.

Tomas