Fitch lowers Urbi

Fitch Ratings said it has downgraded the following ratings for Urbi Desarrollos Urbanos, SAB de CV: foreign currency issuer default rating to CCC from B; local currency issuer default rating to CCC from B; national long-term rating to CCC(mex) from BBB-(mex);

• $150 million senior notes due 2016 to CCC/RR4 from B/RR4; $300 million senior notes due 2020 to CCC/RR4 from B/RR4; $500 million senior notes due 2022 to CCC/RR4 from B/RR4; and

• 600 million pesos of certificados bursatiles due in 2014 to CCC(mex) from BBB-(mex); and national short-term ratings to C(mex) from F3(mex).

Fitch said that the rating downgrades reflect a substantial deterioration of Urbi's liquidity during 2012, which has heightened the risk of default.

Urbi had a negative free cash flow of 7.8 billion pesos during 2012 primarily as a result of increasing working capital requirements that resulted from growing inventory levels and accounts receivables, the agency stated.

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