Initiation on Lycra

All,

Please find our analysis on Lycra here.

We have not taken a position in the bonds but are considering a short position. The Company is exposed to slow down in consumer demand, while operating under high operational leverage. Coupled with poor financial disclosure and shareholder (Ruyi) with financial concerns of its own, we feel the bonds have limited upside and have the potential for large movement downwards.

Please call if you have any questions.