S&P Asgns `mxAA-' Rtg to Corporacion GEO Trust 5129-2.Business Editors NEW YORK--(BUSINESS WIRE)--Standard & Poor's April 18, 2000-- Standard & Poor's today assigned its mx-double-'A'-minus rating to the medium-term notes Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. (certificados de participacion amortizables) issued by Nacional Financiera, S.N.C. (NAFIN), institucion de banca de desarrollo, on behalf of Corporacion GEO (Geostationary Earth Orbit) A communications satellite in orbit 22,282 miles above the equator. At this orbit, it travels at the same speed as the earth's rotation, thus appearing stationary. Trust 5129-2, to securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying originated by subsidiaries of Corporacion GEO S.A. de C.V. (GEO). The rating is based on: -- The high levels of overcollateralization (62%), provided in the form of additional accounts receivable; -- A six-month interest payment reserve account; -- GEO's prominent position in the Mexican housing industry, and successful track record of finishing projects on time, with construction times at almost one-half the rate of the industry average; -- GEO's operating risk Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , given the developer's position and the importance of housing within the country's economic development program. Nonetheless, the transaction is neither GEO's obligation nor is it guaranteed by the company; and -- The potential housing demand in Mexico in coming years, including a 6.5 million-unit housing deficit, and a projected demand for the next three years of 1.5 million. Accounts receivable are generated by GEO when selling homes through the low-income housing programs established by FOVI FOVI Fondo de Operación y Financiamiento Bancario a la Vivienda (Mexico low income mortgage program; now SHF) and INFONAVIT INFONAVIT Instituto del Fondo Nacional para la Vivienda de los Trabajadores (México) , the two main Mexican housing agencies. GEO will perform a transfer at closing of 215.1 million Mexican pesos in accounts receivable into the trust, representing 1.62 times the issuance size. As those accounts receivable are serviced by GEO and collections deposited into the trust, GEO has the option to sell additional receivables to the trust, following a revolving structure, after all payments required every 28 days have been made. The structure is a master trust, where additional series will be issued in the future. GEO's construction group, with 18 subsidiaries, is the largest and most diversified housing developer in Mexico. The group operates in 19 of the 32 Mexican states, Chile, and the U.S. With more than 25 years in the industry, GEO has built nearly 100,000 homes, and had mortgage commitments for 43,374 homes at the end of 1999, Standard & Poor's said.--CreditWire |
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