Cemex Continues Maturity Extension

Fresh off of last month’s $7bn refinancing agreement, Cemex has returned to the bond market to raise $1.5bn to continue its maturity extension efforts. Taking advantage of improvements in its own secondary performance and of continued investor appetite for yield, the cement maker generated $7bn in demand for the new 2022 NC5. “Their yields have recovered and their debt swap transaction helped, and they must have thought now is a good time to come to the market,” says a credit analyst following the sale. Cemex yields have rebounded to single digits after seeing double digit levels in December, he notes. The B+/B minus bond priced at par with a 9.375% coupon, to yield at the tight end of 9.375%-9.500% guidance following 9.500%-area whispers. Bankers following the sale – now the issuer’s most liquid outstanding bond – calculate that the deal priced 20bps through the Cemex 2020 bonds. Participation came from 375 accounts, with mainly US buyers involved, including both EM dedicated and high yield dedicated investors. Proceeds will be used to repay existing debt under the refinancing agreement. JPMorgan, Barclays, RBS, Credit Agricole, HSBC and ING led the transaction. Last month Cemex completed an agreement to extend maturities of $7bn in 2014 debt out to 2017 and 2018, getting 93% acceptance. It plans to raise at least $750m-equivalent through a Colombian IPO of its ex-Mexico assets, though the timing of the process – heard managed by BBVA, Citi and Santander – remains unclear. The cement maker also plans additional asset sales to help with a $1bn paydown it must make in 2013 under the agreement.