Fitch: Outlook stable for five Brazilian homebuilders

Fitch Ratings said it revised the outlook for five Brazilian homebuilders to stable from negative, including Brookfield Incorporacoes SA (BB-), Brookfield Sao Paulo Empreendimentos Imobiliarios SA (BB-), Cyrela Brazil Realty SA Empreendimentos e Participacoes (BB-), Even Construtora e Incorporadora SA (B+) and MRV Engenharia e Participacoes SA (A+(bra)).

Two companies - Gafisa SA (A-(bra)) and Trisul SA (A-(bra)) - retain a negative outlook. A third company, Construtora Tenda SA (BBB(bra)), is in the process of merging into higher rated Gafisa and is on Rating Watch positive.

The agency said the stable outlook for the five homebuilders reflects the fast and consistent changes in the sector's weak fundamentals observed since January 2009 and the limited impact of the global credit crisis on the Brazilian economy. The valuable support extended by the Brazilian government to homebuilders during the crisis limited the liquidity risk in an environment of softened demand, Fitch said.

The negative outlooks for Gafisa and Trisul reflect the companies' weak credit metrics during the last 12 months and the expectation that they will continue to face operating and financial challenges to recover credit metrics to levels reported before the crisis and more in line with their current ratings, the agency added.

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