S&P gives Cyrela notes BB

Standard & Poor's said it assigned its BB rating to the 10-year unsecured and unsubordinated notes denominated in Brazilian reais and payable in dollars, in the aggregate amount of R$500 million, issued by Cyrela Brazil Realty SA Empreendimentos e Participacoes.

At the same time, the agency said it affirmed its BB long-term corporate credit rating and our brAA- Brazil national-scale corporate credit rating on Cyrela and its brAA- issue rating on the company's seven-year R$500 million debentures.

The outlook is stable.

The agency added that the ratings on Cyrela incorporate the risks associated with the company's exposure to the highly competitive, cyclical and fragmented Brazilian homebuilding sector, which is highly dependent on domestic economic performance.

The ratings are also tempered by the higher debt position with the issuances of the debentures and the notes, by the long production cycle in the homebuilding sector, which demands high levels of working capital and the challenges faced by Cyrela to expand its geographic, customer and construction-model diversification, S&P said.

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