Fitch Ratings reduced its issuer default rating on Cemex SAB to junk status Friday, citing softer-than-expected operating results and higher-than-expected leverage levels due to economic volatility.
The ratings agency cut Cemex’s foreign and local currency IDRs to "BB+" from "BBB-" and also downgraded Cemex Espana SA’s IDR to "BB+" from "BBB-."
Earlier this month Cemex, one of the world’s largest building materials companies, said it would cut worldwide staff of 60,000 by 10 percent and attempt to sell $2 billion in assets in the face of declining profits. The company’s third-quarter earnings slid 74 percent, hurt by the continuing housing slowdown.
Builders and others in the housing market have been suffering since the subprime mortgage meltdown, while tightened consumer spending and recession worries have put additional pressure on the sector.
Fitch said it was concerned about Cemex’s liquidity, "as the company faces maturities of $5.7 billion during 2009."
Shares of Cemex added 20 cents, or 2.7 percent, to $7.61 in afternoon trading. The stock has traded between $4.50 and $32.61 over the past year.