Fitch changes Cemex outlook to stable, leaves rating At B

Fitch changes Cemex outlook to stable, leaves rating At B
Published: 19 August 2009

Fitch Ratings said Tuesday it affirmed cement company Cemex’s (CX) credit rating at B, and changed the outlook to stable following the company’s US$15bn debt refinancing.
"Positively, the structure of Cemex’s new amortization schedule minimises the risk of a near-term default by Cemex and should allow the company to further pursue its plan to strengthen its balance sheet and de-leverage the company over the next few years by using free cash flow, an equity issuance as well as selling additional asset to pay down debt," Fitch said in a press release.
Cemex completed an agreement last week to refinance US$14.1bn in bank debt and US$895m in private placements through February 2014.
Semi-annual principal payments on the refinanced debt begin this December with less than US$500m. Another US$2.4bn in mandatory payments come due in 2010 and US$2.1bn in 2011, although the company is aiming to pay off debt at a faster rate to keep spreads from rising under the agreement.
Fitch cut Cemex from investment grade last year as the company faced mounting debt pressures, brought on by the global economic downturn which hurt its earnings after a major leveraged acquisition. The ratings agency lowered Cemex’s rating further in March after a failed bond sale.
Fitch said Cemex’s B rating reflects "the very high leverage that remains at Cemex."