Sao Paulo, November 19, 2012 -- Moody's América Latina (Moody's) has placed PDG Realty S.A. Empreendimentos e Participações (PDG) Ba2 global scale ratings and Aa3.br national scale ratings under review for downgrade. The ratings review was triggered by a significant deterioration in the company's credit metrics due to weaker than expected profitability and Moody's expectation that an improvement in leverage will only be gradual.

Ratings placed under review for downgrade:

- Corporate Family Rating: Ba2 (global scale) and Aa3.br (national scale)

- BRL 250 million 5-year senior secured CCB (Cédula de Crédito Bancário): Ba2 (global scale); Aa3.br (national scale)

- BRL 140 million 7-year senior unsecured debentures: Ba3 (global scale); A2.br (national scale)

Please see ratings tab on the issuer/entity page on moodys.com for information on Global Scale Rating.

RATING RATIONALE

PDG experienced an accelerated growth pace during the last five years with an annual average revenue growth rate of 64% from 2007 to the 3Q12 (LTM), primarily through acquisitions. The aggressive growth strategy led to cost overruns and delayed launches impacting gross margins and profitability, especially during the first half of this year. At the same time, large working capital needs pressured the company's capital structure leading to significant increase in leverage. "Given the increased execution risks and lower operating profitability, the BRL796 million equity capitalization concluded during the third quarter could be insufficient to promote a significant reduction in gross leverage and, at the same time, maintain a strong liquidity position as required for the Ba2 rating category" said Cristiane Spercel, a Moody's Assistant Vice President.

The ratings review process will focus on prospects for PDG to successfully implement its new strategic positioning to improve its current margins, deleverage within a reasonable timeframe and support its market position in an evolving competitive environment. The review will also consider PDG's expected capital structure with the completion of the management initiatives to promote leverage reduction. Moody's will review the company's evolving debt structure to assess a potential impact on the subordination level of unsecured creditors.

The principal methodology used in rating PDG was the Global Homebuilding Industry Methodology published in March 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".br" for Brasil. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Implementation Guidance published in October 2012 entitled "Mapping

Moody's National Scale Ratings to Global Scale Ratings."

Headquartered in Rio de Janeiro, PDG Realty S.A. Empreendimentos e Participações (PDG) is one of largest homebuilders in Brazil operating through its wholly owned subsidiaries, Goldfarb, CHL, Agre and minority investments in other companies. The company's portfolio of products is diverse including projects in 14 Brazilian states, in addition the Federal District and Argentina. During the last twelve month ended September 2012, PDG generated net revenues of BRL5.8 billion (USD3.1 billion).

REGULATORY DISCLOSURES

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Cristiane SpercelAsst Vice President - Analyst Corporate Finance Group Moody's America Latina Ltda. Avenida Nacoes Unidas, 12.551 16th Floor, Room 1601Sao Paulo, SP 04578-903 Brazil JOURNALISTS: 800-891-2518 SUBSCRIBERS: 55-11-3043-7300Brian Oak MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's America Latina Ltda. Avenida Nacoes Unidas, 12.551 16th Floor, Room 1601Sao Paulo, SP 04578-903 Brazil JOURNALISTS: 800-891-2518 SUBSCRIBERS: 55-11-3043-7300(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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