Position as the largest hotel operator in Mexico; and Diversified hotel portfolio with well-recognized brands. High financial leverage; Very aggressive financial policy; Open derivative positions; Operation in the cyclical hotel industry; Geographic concentration in Mexico; and Low profitability. Standard&Poor's Rating Services' 'CCC+' and 'mxB+' ratings on Grupo Posadas S.A.B. de C.V. reflect its continued limited financial flexibility and an increase in its debt because of the margin calls on its open derivative positions in third-quarter 2011. We believe that if foreign exchange volatility persists, the company will have to either increase debt (the breach of its debt incurrence covenant, with unadjusted EBITDA coverage of 2.5x limits its ability to do so) or use its cash balance to cover
