12:43 p.m.
Tuesday, 20 March 2018

Fitch Ratings announced today that adjusted Urbi's credit ratings

Mexicali Baja California.- Fitch Ratings announced today that adjusted Urbi's credit ratings from 'B' to 'CCC' on a global scale and from 'BBB-(mex)' to 'CCC(mex)' its long-term rating and from 'F3(mex)' to 'C(mex)' its short-term rating, both at a National scale.

Urbi Desarrollos Urbanos, S.A.B. de C.V. ("Urbi") is a leading housing developer in Mexico.

The company considers that these adjustments reflect an overreaction to external industry factors, due to the extent and promptness of the correction.

"The rating adjustment to Urbi's debt is an event related to the Rating Watch recently issued to the housing industry due to its interpretation of the impact of the new National Housing Policy on the home developers' cash flow generation.

"The adjustment of the company's rating does not acknowledge Urbi's important progress in its operating consolidation process initiated on July 2012; which will allow it to start with cash flow generation from 2013, and the strengthening of the credit profile with its main banks that has been transformed in project finance with maturities of up to 5 years. These agreements are already in the implementation process, and increases visibility and certainty on the company's funding for over 60% of the units to be developed over the next 5 years".

To this regard, Selene Avalos, Urbi's CFO, commented: "We are in an accelerated transformation of our operating and financial processes to adapt our business model to the new market conditions; to be converted into a smaller but more solid and flexible company".

In its release Fitch comments that factors such as a challenging regulatory environment and changing demand characteristics for the industry have impacted the company's performance.

Urbi Desarrollos Urbanos S.A.B. de C.V. (MSE: URBI*) is a leading company in innovation and sustainable development in the construction of communities in Mexico. Currently, Urbi is present in 39 cities, covering the main metropolitan areas and the most dynamic medium-size cities in the country. In more than 31 years of operations, Urbi has developed over 430,000 homes, and has always conducted its business with a strong emphasis on financial performance, making it one of the most profitable companies in the sector.


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