Homex Tumbles as Loan Spurs Liquidity Concern: Mexico City Mover

Desarrolladora Homex SAB (HOMEX*), Mexico’s biggest homebuilder by sales, tumbled to the lowest price on record as the company’s announcement of a bridge loan today added to speculation that it’s strapped for cash.

The shares fell 9.3 percent to 16.90 pesos at 12:13 p.m. in Mexico City, after earlier falling as much as 13 percent to 16.14 pesos, the lowest ever intraday price. Volume was 161 percent of its 3-month daily average.

Homex said in a regulatory filing that it obtained a bridge loan through ABC Capital under a Sociedad Hipotecaria Federal guarantee program that it will use as working capital to build apartments. The size of the loan wasn’t disclosed. Homex said it was the first homebuilder in its industry to get a loan under the new SHF program.

“The market is taking the news badly about the guaranteed credit,” Carlos Hermosillo, an analyst with Grupo Financiero Banorte SAB, said in a telephone interview from Mexico City. “They’re seeing it more as though they really need liquidity, and they’re using it as a last resort. I don’t think that’s necessarily the case, but that’s the market’s interpretation.”

Under the program announced March 6, the federal government will guarantee as much as 30 percent of losses.

“These federal government programs are very supportive of those of us in the housing industry,” Gerardo de Nicolas, Homex’s chief executive officer, wrote in the company’s statement today.

To contact the reporter on this story: Jonathan Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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