Cerba - comment

Unconfirmed, but Cerba is rumoured to have appointed Houlihan Lokey to advise on its outstanding debt, which has applied further pressure to the trading level of both the senior and subordinated bonds. EQT has denied the rumour, but the reaction to bond prices implies there is a grain of truth to the story. The sub bonds are off 20+ pts, with the seniors off 5pts. In early February, we took a short position based on our expectations of lower volume and lower prices, despite the positive press reports late last year. The EQT denial has caused a rebound, and we may reassess our position later this morning.