Fitch upgrades Cemex, rates new notes BB

Fitch Ratings said it upgraded the foreign- and local-currency issuer default ratings of Cemex, SAB de CV to BB from BB-, as well as its senior secured notes to BB from BB-.

Fitch also said it assigned a BB rating to €400 million of newly issued notes due 2026.

Fitch also said it upgraded Cemex's long-term national scale rating to A+(mex) from A(mex). The company's short-term national scale rating was affirmed at F1+ (mex).

The outlook was revised to stable from positive.

The upgrades are supported by the strengthening of Cemex's capital structure due to $5 billion in debt reduction in the last three years, which was primarily funded with $3.5 billion of free cash flow, Fitch said.

The upgrades also consider the refinancing of about $7 billion of debt and the conversion of $325 million of convertible notes, which lowered interest payments by about $200 million per year, the agency said.

The ratings also consider cement demand, which is expected to contract by low-single digits in 2019 due to subdued investments triggered by policy uncertainty, Fitch said.

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