UPDATE: Deutsche Bank Downgrades Homex Development Corp to Sell; Restatements Reduce FCF Visibility

Deutsche Bank downgraded Homex Development Corp

from Hold to Sell. Deutsche Bank noted, "Homex has reported 4Q12/FY12 results that we find very disappointing in several respects. Most salient was the about‐face on the accounting treatment of the Chiapas prison project, which Homex last year announced it had taken over control of. Homex reversed this, deciding to account for this operation via the equity method and put it in the infrastructure division rather than via the percentage of completion method in the prison division. … We believe the resultant lack of visibility on cash flows and credit metrics ‐ already rather opaque ‐ risks damaging management credibility, potentially eroding Homex's investor base." Homex Development Corp closed at $11.73 on Wednesday.