Background on Cemex and its Significance
Cementos Mexicanos, commonly known as Cemex, is Latin America’s largest producer of construction materials. The company operates in over 50 countries, producing, distributing, and selling cement, ready-mix concrete, aggregates, and other construction materials. Cemex’s global presence makes it a significant player in the international construction industry.
Financial Performance and Recent Developments
Cemex shares led the gains on the Mexican Stock Exchange (BMV) and reached their highest level since 2007 after S&P Ratings assigned the highest rating to Cemex’s proposed bond issuance of up to 7,500 million pesos (approximately $417 million USD).
Stock Performance
- Cemex’s stocks surged 6.12%, reaching 22.03 pesos per share, marking the highest value since October 17, 2007, when it closed at 22.14 pesos.
- This positive performance is attributed to the top rating assigned by S&P Ratings and Fitch Ratings, indicating strong creditworthiness.
Proposed Bond Issuance
Cemex plans to tap the local stock market to raise between 5,000 million pesos (primary issuance) and an additional 2,500 million pesos (overallotment option), totaling up to 7,500 million pesos. The bond will have a five-year maturity and will pay variable interest determined by adding a premium to the 28-day Interbank Offered Rate.
Rating Details
- S&P Ratings assigned ‘mxAAA’, the highest rating for long-term bonds, mirroring Cemex’s long-term issuer credit rating.
- Fitch Ratings gave ‘AA+(mex)’, the second-highest rating for long-term foreign and local currency issuer credit.
Key Questions and Answers
- What is Cemex and why is it important?
Cemex is Latin America’s largest producer of construction materials, operating in over 50 countries. Its global presence makes it a significant player in the international construction industry.
- What led to Cemex’s stock performance increase?
Cemex shares gained 6.12% after S&P Ratings assigned the highest rating to Cemex’s proposed bond issuance of up to 7,500 million pesos.
- What is Cemex planning to do regarding bond issuance?
Cemex intends to raise between 5,000 million pesos and an additional 2,500 million pesos through a bond issuance with a five-year maturity.
- What ratings did Cemex receive from S&P Ratings and Fitch Ratings?
S&P Ratings assigned ‘mxAAA’, the highest rating for long-term bonds, while Fitch Ratings gave ‘AA+(mex)’, the second-highest rating for long-term foreign and local currency issuer credit.
