Fitch Negative Posadas, Chops Iansa

Fitch has downgraded the outlook on the BB rating of Mexican hotel operator Grupo Posadas to negative from stable. The agency says exchange rate volatility has tightened the company’s liquidity as it requires it to post cash on margin calls related to positions held with derivatives. As of September, negative market value on derivative instruments totaled $11.1m, and a month after that, exposure had grown to approximately $50m. Cash required for margin calls at October 31 was approximately $33m. Fitch also says that it expects year-end results in the hotels segment to remain stable, as a depreciated MXP leads to improved performance in coastal hotels and Mexican destinations become more attractive from a cost perspective. In 2009, decreased global economic activity might affect performance and results, Fitch notes. Elsewhere, Fitch put Chile’s Empresas Iansa on watch negative and downgraded its foreign and local currency and $100m unsecured notes due 2012 ratings to BB minus from BB+. The agency says deteriorating financials in 2008 and weak profitability and cash flow as well as a substantial increase in debt levels as reason for the cut. For the first nine months of 2008, says Fitch, Iansa’s debt/Ebitda ratio was 15.1x compared to an average of 4.2x and 2.9x, respectively, between 2005 and 2007. As of September 30, short-term debt represented 59% of Iansa’s total debt, while cash and equivalents cover only 11% of short-term debt. The agency says that if sugar and juice concentrate businesses continue to trend down over the next few months, the company could have difficulty decreasing its leverage below 8.0x by the end of 2008. Meanwhile, Fitch cut ElectroAndina’s outlook to stable from positive and affirmed its local and foreign currency ratings at BB. The outlook revision, says Fitch, reflects the company’s increasing working capital needs, high contracted position under a context of natural gas restrictions for power generators, and uncertainty related to the ou