Moody's rates Cyrela Ba2

Moody's Investors Service said it assigned Ba2 local-currency and a Aa2.br Brazil national scale corporate family ratings to Cyrela Brazil Realty SA Empreendimentos e Participações.

The outlook is stable.

"Cyrela's Ba2 rating reflects its position as the largest homebuilder in Brazil with a strong brand name and good diversity in terms of product offering and geographic locations, as well as an experienced and conservative management team," Moody's vice president Soummo Mukherjee said in a statement.

"The rating is further supported by Cyrela's long track record of operations since 1962 in the Brazilian homebuilding sector and its good access to capital, partly due to its large base of unencumbered assets," added Mukherjee.

These factors are balanced by Cyrela's focus on the high-rise segment, which pressures working capital and free cash flow due to the extended construction periods of more than two years in this segment, the agency said.

Ratings also consider the execution risks associated with Cyrela's strategy of growing in the low-income housing market, given the large number of competitors, some of which have a high level of expertise in this segment, the agency added.

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