S&P downgrades Corporacion GEO to D

Standard & Poor's said it lowered its global scale ratings on Corporacion GEO, SAB de CV to D from CCC+ and removed the ratings from CreditWatch with negative implications, where they were placed on April 12.

The rating action follows GEO's failure to pay its Ps. 2.4 million interest payment due April 26, 2013. The company announced it would not pay the interests corresponding to its domestic debt certificate GEO11 because of its deteriorated liquidity.

"In our opinion, GEO's unanticipated default on this fairly small obligation reflects the massive financial distress the company is undergoing. Our recovery rating on GEO's unsecured notes is 4, meaning that we expect an average recovery for its $700 million outstanding notes between 30% and 50%," S&P said in a news release.

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