CEMEX closes US$3.25 billion syndicated credit agreement

The new Credit Agreement consists of a US$1.5 billion five-year amortising Term Loans and a US$1.75 billion five-year committed Revolving Credit Facility. The committed facility is roughly US$600 million higher than the previous facilities agreement, resulting in a stronger liquidity position which is favourable from a company risk and credit rating perspective.

The Credit Agreement has financial covenants consistent with an investment grade capital structure, with a maximum leverage ratio of 3.75x throughout the life of the loan, and a minimum interest coverage ratio of 2.75x.

The Credit Agreement is denominated exclusively in US Dollars and includes an interest rate margin grid that is about 25 basis points lower on average than that of the previous facilities agreement. Additionally, half of the Term Loans have been swapped into Euros using derivative instruments.

Furthermore, the new Credit Agreement is the first debt to be issued under CEMEX’s recently published Sustainability-linked Financing Framework, which is aligned to the company’s Future in Action strategy and its ultimate vision of a carbon-neutral economy. The annual performance in respect to the three metrics referenced in the Framework may result in a total adjustment of the interest rate margin of plus or minus five basis points, in line with other sustainability-linked loans from investment grade rated borrowers.

"This new Credit Agreement represents a major milestone in our path to investment grade as it is our first major syndicated unsecured bank agreement since 2009. It showcases CEMEX’s continued access to diversified funding sources while further aligning our financing strategy to our leadership in addressing climate change,” said CEMEX CEO Fernando A. Gonzalez. “We are starting a new chapter for the company where we shift our strategic balance a bit more towards growth and the advancement of our Climate Action goals.”

The Joint Bookrunners and Joint Lead Arrangers under the 2021 Credit Agreement are BofA Securities Inc., BNP Paribas, Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A. The Sustainability Structuring Agent for the 2021 Credit Agreement is ING Capital LLC.

Additionally, the Credit Agreement has a simpler guarantor structure to that of the previous facilities agreement. This new guarantor structure has been replicated in all of CEMEX’s senior notes and consists only of CEMEX Concretos, S.A. de C.V., CEMEX Operaciones México, S.A. de C.V., Cemex Innovation Holding Ltd. and CEMEX Corp.

Read the article online at: https://www.worldcement.com/europe-cis/10112021/cemex-closes-us325-billion-syndicated-credit-agreement/