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Cemex Clears Refinancing Hurdle as Debt Exchange Approved

Sept. 10 (Bloomberg) -- Cemex SAB, the largest cement maker in the Americas, will extend maturities of bank loans by three years after its restructuring offer won acceptance from creditors holding 92.6 percent of the debt.

The offer had to be accepted by 91 percent of creditors to go through after the threshold was lowered from an initial 95 percent, and the transaction is expected to become effective in the following weeks, the company said in an e-mailed statement. Cemex plans to sell $500 million of new 9.5 percent senior notes due in 2018 as part of the exchange.

Creditor approval of the offer bolsters Cemex’s efforts to prevent a financing crunch in 2014 by pushing maturities to 2017. The Monterrey, Mexico-based company has posted 11 straight quarterly losses after the U.S. housing slump and global economic slowdown hurt demand for building materials.

“This solidifies the near-term refinancing risk,” said Michael Kim, an analyst at CRT Capital Group LLC in Stamford, Connecticut. “They’ve still got some wood to chop, but they’ve gotten most of the major issues behind them.”

Cemex had 55 institutional creditors participate in the debt exchange offer, said Maher Al-Haffar, a company spokesman.

“It’s a very clear demonstration that investors were very happy with the solutions that were being offered,” he said in a telephone interview. “We don’t want to sound too happy, but it’s really a very good thing to be able to put these refinancing conversations behind us.”

Share Sale

Cemex fell 1.3 percent to 10.33 pesos at the close in Mexico City. The company’s 9.25 percent bonds due May 2020 dropped 0.73 cent on the dollar to 99.02 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Cemex must pay banks $1 billion in March 2013 as part of the debt exchange, and it has said it will sell assets to raise money.

The company has hired Citigroup Inc., Banco Bilbao Vizcaya Argentaria SA and Banco Santander SA to manage the planned sale of a minority stake in its Central American and South American unit, which doesn’t include Mexico assets, Bloomberg News reported last week, citing two people familiar with the matter.

While the details of the share sale are still under discussion, Cemex may raise about $1 billion by listing the unit, a person familiar with the transaction said.

To contact the reporters on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net; Brendan Case in Mexico City at bcase4@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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