LatinFinance - July/August 2016 - 38

posted its first profit for the period since
2009.
Among other moves, Cemex
refinanced $1.94 billion of borrowing
with 17 banks in August 2015, pushing
out the average life of its debt to four
years.
Those achievements helped Cemex
shine among its Latin American and
Caribbean peers to win LatinFinance's
Corporate with the Best Capital Markets
Strategy: Mexico, Corporate with the
Best Bond Market Strategy: High Yield,
and Corporate with Overall Best Capital
Markets Strategy awards.
"They've been very successful for a
highly leveraged company over the last
several years managing their liabilities,"
says Dan Kastholm, a Fitch analyst.
"Sometimes it's not very easy for a
company to present a credit story that
is credible for the market," says Luis
Martínez, an analyst at Standard &
Poor's. "They were able to do that. They
presented a very interesting business
case and credit story.
"The company has made significant
commitments to the market, in terms
of how they would ensure the full
repayment of debt," he adds, and
points to the company's payment of
premiums on some instruments to
compensate investors for the extension
of maturities.

"[CEMEX] HAS MADE
SIGNIFICANT
COMMITMENTS TO
THE MARKET IN
TERMS OF HOW
THEY WOULD ENSURE
THE FULL REPAYMENT
OF DEBT"

SELLING ASSETS: Cemex plans up to $1.5
billion in asset sales this year and in 2017

exercises from April 2014 to March
2015 demonstrated its intense focus on
refinancing its debt and extending its
maturity profile.
"When we closed 2015, we had a
very manageable maturity profile," says
González. "Our strategy has been to
anticipate maturities and ensure we don't
have any over the next 24-month period
so we avoid any uncertainty related to our
ability to refinance the debt."
While the company managed to
reduce its total debt by $2 billion in
recent years, now it is focusing more
intently on deleveraging, he says. It plans
to improve its leverage ratio by selling
between $1 billion and $1.5 billion in
assets. In August 2015, it sold its Austrian
and Hungarian operations to German
operator Rohrdorfer Group for $178
million.
Cemex sold part of its Philippines
subsidiary in a $500 million-equivalent
listing in June. It has also reached an
agreement to sell US assets to another
Mexican company, Grupos Cementos
Chihuahua, in which Cemex also holds a
minority stake. Proceeds from the sales
of assets in Bangladesh and Thailand will
also go towards lowering Cemex's debt,
González says.
Once the asset sales are completed,
the company will turn its attention to
clearing its remaining high-coupon note,
González says. "We only have one note
with a coupon in excess of 9% in 2022
which will be a note to focus on," he says.
González says the company is focused
on expansion in the US.
"The US has been the most significant
market for growth for Cemex in recent
years and this year is no exception,"
he says. "We're seeing volume growth,
we're seeing price growth and market
expansion. And we don't see that story
derailing in any way." LF

Source:Flicker Martin Lopatka

Long game
Between 2013 and 2015, Cemex
refinanced over $11 billion in debt and
reduced interest expenses in the years
2014 and 2015 by almost $300 million
compared to 2013, González says.
Last year, the company focused on
managing a convertible loan, reducing
the overall outstanding amount to $350
million, which had a March maturity.
The company's liability management

LUIS MARTÍNEZ, STANDARD & POOR'S

38 LATINFINANCE.COM - July/August 2016
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Table of Contents for the Digital Edition of LatinFinance - July/August 2016
