Cemex completes refinancing of bank debt

Cement, building materials company has paid off remnants of a $15 billion agreement

Cemex completed the refinancing of a bank loan agreement, paying off the remnants of what was originally a $15 billion debt refinancing at the height of the 2009 global crisis, the Wall Street Journal reports.

The cement and building materials company said it paid ahead of time the remaining $1.94 billion of a 2012 accord, using funds from 17 financial institutions that joined others in a refinancing deal reached about a year ago. The amount owed under the new credit agreement now stands at around $3.79 billion, including €620 million ($680.9 million) and the rest in dollars.

“We have now consolidated our syndicated bank debt in a single agreement under improved conditions that better reflect our financial metrics. We are pleased with the interest shown by the bank market in this transaction and the continued support of our lenders,” Chief Financial Officer José Antonio Gonzlez said in a release.

With the latest refinancing, Cemex’s only significant debt payments in the next two years are $352 million in convertible notes due in March 2016 and a $373 million principal payment in September 2017 on the existing bank loan agreement.

Cemex refinanced around $15 billion in bank debt during the 2009 global crisis, when the company’s earnings fell and put payment of its heavy debt load at risk. In 2012, with about half of the amount left to pay, Cemex rescheduled around $6 billion, and has since carried out further refinancings to lower the cost and extend the maturity of its debt.

The Monterrey company’s total debt at the end of June stood at $15.93 billion, down from $17.05 billion a year earlier.

Cemex has been cutting costs as its earnings recovered in recent years, and the company expects to sell assets for as much as $1.5 billion over the 12 months to pay down debt in an effort to recover the investment-grade ratings it lost in 2009.

Fitch Ratings last week upgraded Cemex to double-B-minus from B-plus-still several notches below investment grade-citing Cemex’s refinancings in the past two years, its improved capital structure and a pickup in the US. cement market.

Cemex shares were down 0.7% at 13.63 pesos (84 cents) early Monday.


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