Cemex gets more commitments, increasing facility to $1.87 billion

By Angela McDaniels

Tacoma, Wash., Nov. 3 – Cemex, SAB de CV received $515 million of commitments from banks that have agreed to join its new credit agreement, according to a company news release.

The new commitments will increase the total amount of the credit agreement to $1.87 billion from $1.35 billion.

The company entered into the credit agreement on Sept. 30. Its main terms are as follows:

• An average four-year term with equal semiannual payments of principal of 20% each, beginning on the third anniversary and with the last payment in September 2019;

• A spread over Libor of between 250 basis points and 375 bps, depending on leverage; and

• A revolving credit tranche of 40% of the total principal amount with the same maturity.

The proceeds of the credit agreement will initially be used to refinance $1.35 billion of debt under the company’s facilities agreement due 2017. The proceeds of the incremental commitments will be applied to partially prepay the facilities agreement and to pay other debt.

After the prepayment of the facilities agreement, the remaining outstanding amount under this facility will be reduced to about $2.05 billion.

Additionally, Cemex said it obtained the required consents to amend the facilities agreement so the covenants and undertakings under this facility are conformed to those of the credit agreement. The main amendments include the following:

• The amounts allowed for capital expenditures were increased to $1 billion per year from $800 million;

• The amounts allowed for permitted acquisitions and investments in joint ventures were increased to $400 million per year from $250 million;

• The restrictions on asset swaps were eliminated; and

• A new mandatory prepayment regime that eliminates the cash sweep covenant and provides Cemex with more discretion to use its cash was introduced.

Cemex is a building materials company based in Monterrey, Mexico.

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