Spreads for outstanding DVI Inc. medical equipment ABS resembled an accordion last week, widening 200 to 300 basis points after word spread that it was in technical default on its unsecured debt obligations. Levels rebounded, however, after the default notice was rescinded the following day, and DVI announced it had hired accounting firm BDO Seidman as its new independent auditor.

"Once word spread of the technical default, people started comparing DVI to National Century Financial Enterprises, but that was a different situation entirely," said a trader. "The talk did temporarily send bonds that were trading at $96/$97 down to the high 80s in an instant," he added.

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