Cerba - comment

S&P downgraded Cerba bonds yesterday on unsustainable capital structure and strained liquidity. It is as if S&P have read our recent note.  The main takeaway is S&P’s statement that the Company’s capital structure is unsustainable. The underperformance resulting from several tariff cuts to French routine testing is well-documented. We concur with S&P's liquidity concern and project a liquidity crunch in FY26, if not earlier. 

S&P has downgraded the Senior Secured bonds to CCC+ from B-, and the unsecured notes are downgraded to CCC- from CCC. The recovery rate on the debt remains static, with the senior Secured estimated at 50-70% and unsecured at 0-30%.