Corporación GEO, S.A.B. De C.V. 9.25% Senior Guaranteed Notes Due 2020 Interest Payable on December 30 and June 30 Corporación GEO, S.A.B
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OFFERING MEMORANDUM U.S.$250,000,000 Corporación GEO, S.A.B. de C.V. 9.25% Senior Guaranteed Notes due 2020 Interest payable on December 30 and June 30 Corporación GEO, S.A.B. de C.V. is offering U.S.$250,000,000 aggregate principal amount of 9.25% senior guaranteed notes due 2020. The notes will mature on June 30, 2020. Interest will accrue from June 30, 2010 and will be payable on December 30 and June 30 of each year, beginning on December 30, 2010. Prior to June 30, 2015, we may redeem the notes, in whole or in part, by paying the principal amount of the notes plus the applicable “make whole” premium and accrued interest. On or after June 30, 2015, we may redeem the notes, in whole or in part, at the fixed redemption prices and subject to the conditions set forth in this offering memorandum. On or prior to June 30, 2013, we may also redeem up to 35% of the notes with the net proceeds of certain equity offerings. In addition, in the event of certain changes in the Mexican withholding tax treatment relating to payments on the notes, we may redeem all (but not less than all) of the notes at 100% of their principal amount, plus accrued and unpaid interest. There is no sinking fund for the notes. See “Description of Notes.” The notes will be unconditionally and irrevocably guaranteed by: GEO Baja California, S.A. de C.V., GEO del Noroeste, S.A. de C.V., GEO D.F., S.A. de C.V., GEO Edificaciones, S.A. de C.V., GEO Urbanizadora Valle de las Palmas, S.A. de C.V., GEO Guerrero, S.A. de C.V., GEO Hogares Ideales, S.A. de C.V., GEO Jalisco, S.A. de C.V., GEO Laguna, S.A. de C.V., GEO Monterrey, S.A. de C.V., GEO Morelos, S.A. de C.V., GEO Puebla, S.A. de C.V., GEO Casas del Bajío, S.A. de C.V., GEO Tamaulipas, S.A. de C.V., GEO Veracruz, S.A. de C.V. and Promotora Turística Playa Vela, S.A. de C.V. The notes will rank equally with our existing and future senior unsecured indebtedness. The subsidiary guarantors set forth above, as well as any future subsidiaries meeting certain criteria, will fully and unconditionally guarantee the notes on a senior basis. Each guarantee will be unsecured and rank equally with all existing and future senior unsecured indebtedness of the subsidiary guarantors. The notes will also be effectively subordinated to our and our subsidiary guarantors’ secured indebtedness to the extent of the value of the assets securing such indebtedness. The notes will be structurally subordinated to indebtedness and other obligations of our non-guarantor subsidiaries. As of March 31, 2010, after giving pro forma effect to this offering, we would have had Ps.6,039.2 million (U.S.$489.8 million) of consolidated senior unsecured indebtedness and Ps.2,093.3 million (U.S.$169.8 million) of consolidated secured indebtedness. For a more detailed description of the notes, see “Description of Notes” beginning on page 86. Application has been made to the Luxembourg Stock Exchange for the notes to be admitted to listing on the Official List and to be admitted to trading on the Euro MTF market. This offering memorandum constitutes a prospectus for the purposes of the Luxembourg law on prospectuses for securities, dated July 10, 2005. Investing in the notes involves risks. See “Risk Factors” on page 14 of this offering memorandum. PRICE 98.409% AND ACCRUED INTEREST, IF ANY The notes have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. Unless they are registered, the notes may be offered only in transactions that are exempt from registration under the Securities Act, as amended, or the securities laws of any other jurisdiction. Accordingly, we are offering the notes only to qualified institutional buyers and persons outside the United States. For further details about eligible offerees and resale restrictions, see “Transfer Restrictions” beginning on page 144. The information contained in this offering memorandum is exclusively the responsibility of Corporación GEO, S.A.B. de C.V., and has not been reviewed or authorized by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, or “CNBV”). The notes may not be publicly offered or traded in Mexico unless they are offered or traded pursuant to the provisions of the Mexican Securities Market Law (Ley del Mercado de Valores) and the regulations issued thereunder. As required under the Mexican Securities Market Law, we will notify the CNBV of the offering of the notes outside of Mexico. Such notice will be delivered to the CNBV to comply with a legal requirement and for information purposes only; therefore, the delivery to and the receipt by the CNBV of such notice does not and will not imply any certification as to the investment quality of the notes, our solvency, liquidity or credit quality or the accuracy or completeness of the information included in this offering memorandum. The information contained in this offering memorandum is exclusively our responsibility and has not been reviewed or authorized by the CNBV. In making an investment decision, all investors, including any Mexican investors who may acquire notes from time to time, must rely on their own review and examination of Corporación GEO, S.A.B. de C.V. The acquisition of the notes by an investor who is a resident of Mexico will be made under its own responsibility. The notes will be ready for delivery in book-entry form only through The Depository Trust Company, the Euroclear Bank S.A./N.V., and Clearstream Banking, société anonyme, Luxembourg, on or about June 30, 2010. Joint Book-Running Managers MORGAN STANLEY CITI SANTANDER June 25, 2010 Las Garzas, Morelos Las Garzas, Morelos Hacienda del Jardín, Edo. de Méx. Villas del Campo, Edo. de Méx. TABLE OF CONTENTS Page Page Notice to New Hampshire Residents......................... iv Management’s Discussion and Analysis of Notice to Prospective Investors in the United Financial Condition and Results of Operations......33 Kingdom ................................................................. iv The Mexican Housing Industry.................................47 Notice to Prospective Investors in European Our Business .............................................................57 Economic Area ....................................................... iv Management..............................................................78 Available Information................................................. v Principal Shareholders ..............................................84 Service of Process and Enforcement of Civil Related Party Transactions........................................86 Liabilities................................................................. v Description of Notes .................................................87 Disclosure Regarding Forward-Looking Taxation ..................................................................139 Statements.............................................................. vii Transfer Restrictions...............................................145 Presentation of Financial and Other Information.....viii Plan of Distribution.................................................148 Terms Used in this Offering Memorandum............... xi General Information................................................152 Summary..................................................................... 1 Legal Matters ..........................................................153 Risk Factors.............................................................. 14 Independent Auditors..............................................154 Use of Proceeds ........................................................ 25 Description of Certain Differences between Exchange Rates ........................................................ 26 Mexican FRS and U.S. GAAP.............................155 Short-Term Debt and Capitalization......................... 27 Index to Consolidated Financial Statements ........... F-1 Selected Consolidated Financial and Other Information ............................................................ 28 i __________________________ In this offering memorandum, “Corporación GEO,” “GEO,” “we,” “us,” “our” and “our company” refer to Corporación GEO, S.A.B. de C.V., and its consolidated subsidiaries, unless the context otherwise requires or unless specified otherwise. References to the “Issuer” or the “Company” mean, unless the context otherwise requires, Corporación GEO, S.A.B. de C.V. You should only rely on the information contained in this offering memorandum. We have not authorized anyone to provide you with different information. Neither we nor the initial purchasers are making an offer of the notes in any jurisdiction where the offer is not permitted. We, having made all reasonable inquiries, confirm that the information contained in this offering memorandum with regards to our company is true and accurate in all material respects, that the opinions and intentions we express in this offering memorandum are honestly held, and that there are no other facts the omission of which would make this offering memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. We accept responsibility accordingly. As required under the Mexican Securities Market Law, Corporación GEO, S.A.B. de C.V. will notify the CNBV of the offering of the notes outside of Mexico. Such notice will be delivered to the CNBV to comply with a legal requirement and for information