Reuters logo
TEXT-Fitch rates Grupo Posadas notes reopening 'B+/RR3'
January 25, 2013 / 9:52 PM / 5 years ago

TEXT-Fitch rates Grupo Posadas notes reopening 'B+/RR3'

Jan 25 - Fitch Ratings has assigned a 'B+/RR3'rating to Grupo Posadas S.A.B.
de C.V.'s (Posadas) USD $50 million reopening of its senior
unsecured notes due 2017. Proceeds from the reopening are expected to be used
primarily to pay down existing debt and, to a lesser extent, for general
corporate uses.

The recovery ratings are 'RR3', which indicates good recovery prospects given
default. 'RR3' rated securities have characteristics consistent with securities
historically recovering 51% - 70% of current principal and related interest.

Posadas' ratings are supported by the company's solid business position, strong
brand name and multiple hotel formats. Conversely, the ratings are tempered by a
track record of high leverage, as well as industry cyclicality. Posadas'
presence in all major urban and coastal locations in Mexico, consistent product
offering and quality brand image have resulted in occupancy levels that are
above the industry average in Mexico. The use of multiple hotel formats allows
the company to target domestic and international business travelers of different
income levels as well as tourists, diversifying its revenue base.

Posadas recently completed a successful divestiture of its South American hotel
operation for USD $275 million as well as the sale of 11 hotels to the
FibraHotel REIT for about USD $117 million. Going forward, Posadas' strategy
will be mostly focused on operating and providing services to new hotels rather
than acquiring additional properties. New openings should continue for all
brands, mainly Fiesta Inn and One, under managed and leased formats. This
strategy of openings reduces Capex and supports free cash flow generation.

This reopening does not unduly affect leverage. On a pro forma basis, excluding
the recently divested South American operations, hotels sold to FibraHotel and
one-time charges, Fitch estimates total adjusted debt to EBITDAR and total debt
to EBITDA at 5.3 times (x) and 4.7x, respectively, from estimates of 5.1x and
4.4x before the reopening. Taking into account estimated cash levels, Fitch
believes that net adjusted debt to EBITDAR and net debt to EBITDA will be about
3.9x and 2.9x, respectively.


Fitch currently rates Posadas as follows:

--Local currency Issuer Default Rating (IDR) 'B';
--Foreign currency IDR 'B';
--National scale rating 'BB+(mex)';
--USD $300 million senior notes due 2017 'B+/RR3';
--USD $200 million senior notes due 2015 'B+/RR3';

The Rating Outlook is Stable.

Contact:

Primary Analyst
Miguel Guzman-Betancourt
Associate Director
Fitch Mexico S.A. de C.V.
+52 81 8399-9100
Prol. Alfonso Reyes 2612
64920 Monterrey, Mexico

Secondary Analyst
Sergio Rodriguez, CFA
Senior Director
+52 81 8399-9100

Committee Chairperson
Alberto Moreno
Senior Director
+52 81 8399-9100


Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email:
elizabeth.fogerty@fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 8, 2012);
--'Recovery Ratings and Notching Criteria for Non-financial Corporate Issuers'
(Aug. 14, 2012).

Applicable Criteria and Related Research:
Corporate Rating Methodology
Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
here. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF
CONDUCT' SECTION OF THIS SITE.


     

    Criteria
    Regulatory
    Form NRSRO
    Terms Of Use
    Endorsement Policy
    Privacy Policy
    Code of Ethics
    Site Index
    Press Room

Copyright © 2013 by Fitch, Inc., Fitch Ratings Ltd. and its subsidiaries.
Home
Ratings and Research
Multimedia
Tools
Products and Services
Fitch Training
<% //code to detect iphones or ipads String userAgent =
request.getHeader("User-Agent").toLowerCase(); if(userAgent.contains("ipad") &&
(session.getAttribute("shownIPadMessage") == null ||
!session.getAttribute("shownIPadMessage").equals("true"))) {
session.setAttribute("shownIPadMessage","true"); %> <% }%> FITCH RATES POSADAS'
2017 SENIOR NOTES REOPENING 'B+/RR3'

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below