S&P says US$650m notes add-on not to sway Cemex’s rating

S&P says US$650m notes add-on not to sway Cemex’s rating
Published: 20 July 2011

S&P said on Tuesday the additional US$650m issue to the existing seven-year US$1bn senior secured notes of Cemex has no impact on the issuer’s B senior secured debt rating.

The notes amount to US$1.65m after the reopening. Cemex will use the proceeds from the recent bond reopening to refinance most of its 2012 maturities and some US$200m of its 2013 financing agreement’s maturities, avoiding a 50-basis-point margin step-up.

The notes add-on also leaves intact the recovery rating of 3, reflecting meaningful (50-70%) recovery prospects in a payment default.

The company has also decided not to proceed with the issuance of up to US$650m long-term notes due 2019. Therefore, the B rating on the notes was terminated.

The ratings of Cemex and its subsidiaries are limited by the group’s "highly leveraged" financial risk profile, marked by high debt levels, less-than-adequate liquidity and cash flow concentration in a few core operating markets, S&P said.