Moody's downgrades Urbi

Moody's Investors Service said it downgraded Urbi Desarrollos Urbanos, SAB de CV's global scale foreign-currency senior debt rating to Ca from Caa2, and Moody's de Mexico downgraded Urbi's national scale senior debt rating to Ca.mx from Caa2.mx and its corporate family rating to Ca from Caa2. The ratings remain under review for downgrade.

The downgrade follows Urbi's failure to make the interest payment on its 2014 local bonds within the required three-business-day grace period, which expired on May 6. The agency said this constitutes an event of default under the bond indenture and triggers a payment acceleration of not only the local bonds but likely the company's remaining debt.

The agency said the acceleration places a large burden on the company's already feeble liquidity position and viability, and the Ca rating implies a diminished recovery to bondholders and other stakeholders.

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