Cemex fell to the lowest in a month after Standard & Poor’s cut its credit rating to below investment grade amid a slump in demand in the US and Mexico.
Monterrey-based Cemex dropped 30 centavos, or 2.5 per cent, to MXP11.84 in Mexico City trading, the lowest since Dec. 24.
“This has to increase their financing costs,” said Gonzalo Fernandez, head of equity research for Banco Santander SA’s Mexico City unit. “There are market participants that can’t buy debt that’s not investment grade.”
S&P yesterday lowered Cemex’s rating one level to BB+, or junk status, saying the company’s earnings will be hurt by slowing economies in the US, Mexico and Spain. The rating may be cut further following a review, S&P said. In October, S&P cut Cemex’s credit rating one level to BBB-.