S&P rates Urbi notes BB

Standard & Poor's said it assigned a BB corporate credit rating to Mexico-based Urbi Desarrollos Urbanos SA de CV and a BB rating to the company's $150 million notes due 2016. The outlook is stable.

Proceeds of the proposed bond will be used to refinance debt in the Mexican domestic market and for working capital purposes.

S&P said the ratings are limited by the company's aggressive financial policy, the concentration of mortgage origination in public housing entities and seasonality derived from that dependence, increasing competition and significant working capital needs for project construction and land purchases for future developments.

The ratings are supported by Urbi's operating efficiency, positive free operating cash flow generation, adequate liquidity and credit ratios and the company's position as one of the largest homebuilders in Mexico, the agency said. Total debt to EBITDA is 0.9x.

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