Fitch cuts debt ratings of Cemex

Fitch cuts debt ratings of Cemex
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.

Published under Cement News