Leads Seen Supporting Cemex Bond

Cemex is expected to price a BB/BB+ benchmark-size bond this week, likely paying a yield of 13%-15%, according to investors following the transaction. The troubled Mexican cement producer, relegated to high-yield territory and facing an urgent need to roll over debt, is set to wrap-up meetings with investors Wednesday. With leads BBVA, Citi, HSBC, RBS and Santander recently managing $4bn in loan restructurings, the group of banks is heard prepared to take a majority of the issue if necessary, selling it later in the secondary. “It’s more that the banks are looking to offload exposure than anything else,” says an EM debt manager who holds Cemex paper. He notes that a deal would be positive for existing holders, as it will establish a much-needed price reference for the credit, and possibly tighten its other bonds. Buysiders expect a tenor of 5 years. The last LatAm high-yield corporate issue was B+ rated Mexican marine contractor Oceanografia, pricing in July a $335m 11.25% 2015 bond to yield 11.50%. Cemex refinanced $4bn in short-term debt in January, terming out 2009 and 2010 bilateral loan maturities until February 2011. It plans to lower net debt by at least $3.6bn this year to $14.3bn, primarily through asset sales.