Moody’s cuts Grupo Posadas

Moody’s Investors Service said it downgraded Grupo Posadas, SAB de CV’s corporate family rating and the senior unsecured rating on its 2022 notes to Ca from Caa1.

“The action follows Posadas’ announcement that it will not pay the $15.5 million coupon due June 30, on its 7 7/8% senior notes due 2022. Since the company will not make such payment during the subsequent 30-day cure period, it will constitute an event of default,” Moody’s said in a press release.

The agency said it doesn’t expect the company to get any support from the Mexican government.

“Although the company’s cash position is enough to cover some nine months of cash burn at the currently low occupancy levels, liquidity will rapidly deteriorate. Under the current environment, bondholders are at risk of having losses in the 35% - 65% range, consistent with the Ca rating,” Moody’s said.

The outlook remains negative.

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