Thursday, 8 January 2009

S&P Downgrades Mexico's Posadas Local Ratings Due to Derivatives Exposure

Standard and Poor's downgraded Grupo Posadas's local ratings to mxBBB+’ from ‘mxA-’. The decision comes in the wake of the company's announcement in November that it incurred a $76 million loss stemming from bad bets in the use of currency derivatives. The outlook is negative, signaling that there is ''uncertainty related to Posadas's open position in currency derivatives, which may generate restrictions in cash holdings if the peso weakens against the dollar.'' The open contracts are linked to debt worth 2.25 billion pesos.

Posadas's foreign currency ratings were kept unchanged at BB- (junk.)

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