Fitch rates Geo notes BB-

Fitch Ratings said it assigned a BB- with recovery rating of RR3 to the Corporacion Geo, SAB de CV's proposed $250 million of senior notes due in up to 10 years. Its local-currency issuer default rating is B+, foreign-currency issuer default rating is B+, long-term national scale rating is BBB+(mex) and certificados bursatiles issuances (GEO 05-2, GEO 06, GEO 08, GEO 09, GEO 09-2) are BBB+(mex).

The outlook is stable.

The proceeds of the new notes will be used to refinance current debt, Fitch said.

The ratings reflect Geo's strong market position in the highly fragmented Mexican homebuilding industry, being one of the largest homebuilders in Mexico in terms of home units sold, the agency said.

The ratings are constrained by its dependence on financing government-related mortgages for low-income homes and its high working capital requirements related to the operation, Fitch said.

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