Despite the recent improvement in Posadas's operations, margin calls on its open derivative positions associated with the volatility of the Mexican peso could continue to hurt the company's financial flexibility. Moreover, we believe the company will continue to depend on bank covenant waivers. We are lowering our ratings on Posadas, including the global and national scale corporate credit ratings to 'CCC+' from 'B-' and 'mxB+' from 'mxBB-', respectively. The negative outlook reflects the possibility of an increase in Posadas's debt or a decrease in its liquidity cushion that could lessen its ability to make its 2012 bank amortization payments. On Dec. 27, 2011, Standard&Poor's Ratings Services lowered its ratings on Mexican hotel operator Grupo Posadas S.A.B. de C.V.
