Cemex sold US$1.77bn of bonds denominated in dollars and euros as it seeks to repay loans from a US$15bn debt restructuring, said a person familiar with the transaction.
The company sold $1.25 billion of seven-year dollar bonds to yield 9.50 percent and 350 million euros ($515.7 million) of eight-year euro bonds to yield 9.625 percent, said the person, who declined to be identified because he’s not allowed to speak publicly. The company boosted the size of the dollar bond from $1 billion and the euro bond from 300 million euros, the person said.
Cemex returned to the bond market nine months after the company’s failure to sell $500 million of securities forced it to extend payments on bank debt it took on to finance the $14.2 billion acquisition of Sydney-based Rinker Group Ltd. in 2007. Cemex reached a $15 billion refinancing agreement with it banks in August to avoid default after the global recession in the U.S., the company’s largest market, eroded revenue.
“The timing is clearly much better from a market point of view, given the steep spread compression that has taken place since the end of the first quarter of this year,” Andrew Belton and Charles-Henri Boivin, analysts at CreditSights Inc., wrote in a report today. “Cemex now has a much better credit story to tell than it did at the end of February 2009.”