Moody's drops Posadas

Moody's Investors Service said it downgraded Grupo Posadas, SAB de CV's senior unsecured debt and corporate family ratings to B1 from Ba3.

The outlook is negative. This rating action concludes the review for possible downgrade initiated on Oct. 23, the agency said.

Moody's noted that the downgrade reflects Posadas' currently tight liquidity, caused by recent margin calls under certain derivative contracts, and the expected deterioration of credit metrics because of the need to externally fund the cash collateral requirements of those derivatives and re-establish short-term financial flexibility.

"The downgrade also incorporates the view that the continued deterioration of economic conditions may challenge near-term cash flow generation and create additional pressure on credit metrics," said Moody's vice president Sebastian Hofmeister.

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