Urbi Takes Advantage of Positive Swap Position and Restructures the Cross-Currency Swap on Urbi2016 US$150 Million to Cover Interest Coupons for 2011- 2016
- Company Uses the Positive Asset Currency Swap Position on the Existing Agreement to Pay for the Restructuring.
- With This Transaction, Both Principal and Interest Coupons Are Now Hedged Until Maturity.
MEXICALI, Mexico, Feb. 25 /PRNewswire-FirstCall/ -- Urbi Desarrollos Urbanos SAB de CV has announced that it has signed a cross-currency swap agreement with Morgan Stanley to extend the coverage of its hedge to also include the interest coupons of its US$ bond due 2016 for the period April 2011 to April 2016, which were not previously covered. Both principal and interest coupons of this bond are now hedged until maturity.
After this transaction, the interest rate is now fixed at 10.5% in Mexican pesos until the bond's maturity in April 2016. The exchange rate is fixed at MX$13.75.
In April 2006, Urbi issued 10-year (non-call 5) US$150 million senior guaranteed notes due in 2016. At that time, the Company signed an agreement to hedge both the principal until maturity and the first 5 years of interest coupons, to eliminate cross-currency risk and uncertainty on its financial expenses. As of December 31, 2009, Urbi had a positive asset currency swap position of MX$165.6 million included in its balance.
About this transaction, Selene Avalos, Urbi's CFO, said: "With this step, the Company finalizes its two-stage hedge strategy for such long-dated instrument as the Urbi2016 bond, resting our decisions on well documented technical analysis. As we resume our growth strategy with free cash flow generation in 2010, the basis of it continues to be prudence and a higher liquidity position for the Company, which is backed with a track record of profitable and consistent operational performance."
For 2010, Urbi is planning to grow its revenues by 10%, and -- thanks to additional SG&A and financial expenses reductions -- increase its net income by 12-15%, with a strong free cash flow generation.
Urbi Desarrollos Urbanos S.A.B. de C.V. (MSE: URBI*) is the leading housing developer in Mexico and the biggest developer in the northern states, an area with one of the highest growth rates. Currently, Urbi is present in 29 cities across 15 states, covering the three main metropolitan areas and the most dynamic medium-size cities in the country. In over 28 years of operations, Urbi has developed over 300,000 homes, and has always conducted its business with a strong emphasis on financial performance, making it one of the most profitable companies in the sector. Urbi has a unique and replicable business model supported by UrbiNet, its state-of-the-art IT platform.
Contact:
Antonio Jorge
Investor Relations Manager
Urbi Desarrollos Urbanos, SAB de CV
Rio Danubio # 109
Colonia Cuauhtemoc
06500 Mexico DF,
Phone: 011 52 55 11020390x10724
E-mail: [email protected]
SOURCE Urbi Desarrollos Urbanos S.A.B. de C.V.
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