Cemex Avoids Margin Step-Up

Mexico’s Cemex has made a $131m final prepayment under its 2009 financing agreement, allowing it to avoid a 50bp hike in interest expenses and saving it $37.5m annually, Maher Al-Haffar, the cement company’s VP of investor relations, tells LatinFinance. “We have done a lot of things in the first part of this year and last year to avoid step-ups,” he says. “We are comfortable, as our next maturity is not due until 25 months from now.” The company has now reduced the outstanding amount on the financing agreement by about $7.66bn – more than half of the original $15bn originally owed on bank loan. “This is definitely positive and gives us calm,” says Jerry Orosco, a Cemex bondholder and VP at Intercontinental Asset Management. Cemex 2020 bonds jumped a point yesterday to 68.5 on the back of the news. The company is expected to issue third quarter results next week.