Cemex rose the most in three months and call options jumped on speculation its creditor banks will refinance the company’s debt to avoid pushing it into default.
“An agreement with the banks is the most likely outcome,” Patricio Rivera, an analyst with the Mexico City-based brokerage Grupo Financiero IXE, said in an interview. “If you let the company default, the process of collecting could be longer and it could add costs that could be avoided with a fair refinancing transaction.”
Cemex’s American depositary receipts surged 16 percent to $5.83 in New York Stock Exchange composite trading, the most since Dec. 16.
Today’s call-option volume was three times greater than puts. The most actively traded March call contract, which bets shares will rise above $5, doubled to 80 cents. Yesterday’s traded call options were 25 times the previous day’s volume. Calls give the right to buy a security for a certain amount, the strike price, by a given date.
The Mexican company announced in a March 9 statement it would seek to refinance US$14.5bn of loans with its bankers after calling off a proposed US$500m bond sale last week. Cemex said it “intends to meet all its obligations.”
Cemex has faced difficulty extending the maturity on short- term debt used for the US$14.2bn Rinker Ltd. acquisition in July 2007 because of a global credit crunch and a construction recession that has crimped profits.
March 12 (Bloomberg)