Deutsche Bank Sues Urbi in N.Y. for $61M Over Loans

Deutsche Bank AG sued Mexican real estate developer Urbi Desarrollos Urbanos SAB in New York for $61.1 million for defaulting on loans, while a Barclays Plc unit sued homebuilder Desarrolladora Homex SAB over a swaps agreement.

Deutsche Bank made loans valued at $50 million and $55 million to Mexicali-based Urbi, according to a complaint filed in New York State Supreme Court in Manhattan. In April, Urbi didn’t make a $3 million payment on the $55 million loan and also failed to pay $1.55 million in interest on the two loans, Deutsche Bank said.

Barclays today sued Culiacan, Mexico-based Homex in the same court for an alleged breach of a swaps and derivatives agreement. Barclays said it incurred losses of $536.6 million as a result of the default. Last week, Credit Suisse Group AG sued Homex, Mexico’s biggest homebuilder by revenue, seeking $26.7 million over a canceled derivatives transaction.

Mexican homebuilders have struggled to prevent declines in their cash reserves as the government shifts subsidies to promote more capital-intensive apartment construction in cities, instead of individual homes in commuter towns. Home foreclosures in Mexico more than doubled last year to a record 43,853.

Urbi’s cash and cash equivalents fell 95% in the first quarter from the previous quarter. The company, the biggest Mexican builder by the number of homes, has hired Rothschild to advise it on a possible restructuring. Urbi was sued in New York last month by Credit Suisse and Barclays over financial derivatives.

David Aguilar, a spokesman for Urbi, declined to comment on the Deutsche Bank suit, saying in a phone interview that the company hasn’t seen the complaint.

Deutsche Bank also sued the guarantors of the Urbi loans and promissory notes, seeking $46.8 million in damages. The Frankfurt-based bank said that because of the default, it terminated a swap agreement with Urbi involving interest-rate and foreign-exchange option transactions. Deutsche Bank said it told Urbi the developer owed $37.7 million on the agreement.

Barclays, in its suit claimed Homex failed to make a required transfer of $710 million to the bank this month as collateral to cover potential losses, triggering the default. London-based Barclays said Homex was obligated to pay $536.6 million for the early termination of the contract.

Marena Rubio, a spokeswoman for Homex, didn’t immediately respond to an email seeking comment on the suit.