Some holders of $1.2b in bonds linked to Etihad Airways are seeking to appoint legal advisers to evaluate their options with respect to a potential default of the notes, sources familiar with the matter said. Etihad issued the bonds in 2015 and 2016 through an Amsterdam-based special purpose vehicle, called Equity Alliance Partners (EAP). The proceeds were used to enter into separate debt obligations with Etihad and airlines partially owned by the Abu Dhabi carrier at the time, including Alitalia and Air Berlin, both of which are now insolvent. The bonds lost over 25 cents on the dollar after Alitalia entered special administration and Air Berlin filed for bankruptcy last year. With over $500m of the paper held by United Arab Emirates investors, EAP bondholders have assumed that Etihad, which is owned by the government of Abu Dhabi, would step in to support the notes despite the insolvency of the two European airlines. Etihad, however, is not legally obliged to do so because the bonds have no cross-default provision. Etihad declined to comment.<br/>