Cemex to Issue at Least $400m

Cemex plans to issue a minimum of $421m in new 9.5% 2018 bonds as a result of its exchange offer launched at the beginning of the month to extend maturities of $7bn in debt, it says. The $421m amount reflects demand for the bonds – one of three new debt options on the table for accepting holders – as of the July 19 early deadline. The final amount of the new notes to be issued will determined after the August 20 final deadline and is subject to a $500m cap, which may be increased or decreased at the Mexican cement maker’s discretion. The new 2018 notes are callable in 2016 and guaranteed by more than seven Cemex units. Cemex is offering lenders an exchange of their current exposure into one or more of four securities – the 2018s, new loans paying Libor+525bp, new USD private placement notes paying 9.66%, or new yen-denominated private placement notes paying 7.735%. The interest rates on the loans and private placement notes reduce over time based on prepayment targets. Participating creditors receive an exchange fee of 80bp, and a 50bp additional cash fee if the Cemex ADS exceeds $14.50 during the 90 days after April 1, 2015. As part of the new proposal, Cemex plans to make a $1bn paydown in 2013. If it misses the payment, the debt maturity reverts to 2014. It expects to fund the paydown with asset sales, including minority stakes in Cemex operations in select countries, selected US and European assets and other non-core assets. After the paydown, the remaining debt amortizes $500m in February 2014 and $250m each in June and December 2016. The offer is contingent on acceptance from creditors representing at least 95% of existing exposures.