Fitch rates Posadas add-on BB-

Fitch Ratings said it assigned a rating of BB- to Grupo Posadas SA de CV's proposed add-on offering of $75 million 8¾% unsecured notes due 2011. These notes are an extension of the $150 million 2011 senior notes issued in September.

Proceeds of the offering are expected to be used to refinance existing debt.

Fitch also affirmed Posadas' senior unsecured debt including the $150 million notes due 2011 at BB-. The outlook is stable.

Fitch said the ratings reflect Posadas' solid business position, strong brand name, and multiple hotel formats. The company's presence in all major urban and resort locations in Mexico, consistent product offerings, and quality brand image have resulted in occupancy levels above the industry average in Mexico.

The company operates in a competitive and highly fragmented lodging industry in Mexico. Over the past few years, rates have been pressured due to growing room capacity in urban locations and sluggish demand due to a weak Mexican economy.

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