Fitch cuts debt ratings of Cemex

Fitch cuts debt ratings of Cemex
Published: 11 March 2009

Cemex’s credit ratings were cut five levels by Standard & Poor’s and three levels by Fitch Ratings a day after the company shelved a bond sale and said it was pursuing debt renegotiation with banks, reports Bloomberg News.

The company’s long-term global rating was lowered to B-, or six levels below investment grade, from BB+ by S&P. Fitch cut Cemex’s foreign- and local-debt ratings to B, or five levels below investment grade, from BB. Both S&P and Fitch said they may lower the rating further.

The rating cut “reflects our concerns about timely refinancing of its bank loan maturities in 2009,” S&P said in a statement. “We remain concerned that depressed asset prices and the near-freeze in global credit markets may hamper refinancing efforts and asset sales.”

Cemex is in talks to renegotiate about US$14.5bn in bank debt after climbing borrowing costs forced it to suspend a planned international bond sale of US$500m. The global credit crisis has hampered the company’s ability to refinance short-term loans it used to pay for the US$14.2bn purchase of Rinker Group Ltd. in 2007.

S&P said Cemex has a cash shortfall to meet debt maturities of between US$1.8bn and US$2bn after using its cash profits to pay debt. Cemex has said it plans to sell assets to make up the shortfall in addition to its efforts to refinance debt.