S&P: Desarrolladora Homex outlook down to negative

Standard & Poor's said it revised its outlook on Desarrolladora Homex SAB de CV to stable from negative and affirmed its BB- long-term corporate credit rating.

The rating reflects the company's aggressive growth in a highly competitive market, higher use of debt to support its growth plans and significant working capital requirements that have limited free operating cash flow generation, S&P said.

The rating also reflects the concentration of mortgage origination in Infonavit and Fovissste and a degree of political risk inherent to these institutions, the agency said.

The outlook reflects the expectation of a significant debt reduction from current levels.

For the last 12 months ended Sept. 30, 2010, Homex posted an adjusted total debt-to- EBITDA ratio 3.1 times.

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