Cemex to issue MXN4.1B convertible bonds

Cemex to issue MXN4.1B convertible bonds
Published: 11 December 2009

Cemex will issue MXN4.1bn (US$320m) in convertible bonds Thursday in exchange for local notes held mostly by pension fund managers.

Under the offer, which closed Wednesday, Cemex will issue 10-year bonds convertible into 172.5 million of its CPO shares.

The Monterrey company, which recently raised $1.78 billion in a global equity offering, won’t receive any proceeds from the transaction. Cemex will cancel existing notes for MXN4.1 billion with maturities in 2010, 2011 and 2012.

The convertible bonds will pay 10% annual interest in quarterly installments. Conversion is mandatory at maturity or if the Cemex CPO price reaches MXN35.88, and holders can convert them after one year on interest payments dates. The conversion price is MXN23.92.

The closing of the exchange offer wraps up a busy week in debt markets for Cemex, which in August completed the rescheduling of $15 billion in bank debt and private placement notes.

Also Wednesday, Cemex sold EUR350m in eight-year notes at 9.625% and US$1.25bn in seven-year notes at 9.5%. Cemex said most of the money from those bonds will be used to pay down debt under its refinancing, with US$400m to be used to increase its cash balance and for other corporate purposes.