Cemex achieves release of liens on collateral securing loans, notes

By Rebecca Melvin

Concord, N.H., Oct. 12 – Cemex, SAB de CV amended its credit agreement dated July 19, 2017, modifying financial covenants relating to the release of liens on collateral securing its senior debt, according to a company release and a 6-K filed with the Securities and Exchange Commission on Tuesday.

The release of security guaranteeing the debt “is the result of the company’s deleveraging process and marks a decisive step in its path towards an investment-grade credit rating,” the company said.

The collateral guaranteed debt under its main bank agreement and its senior secured notes.

The amendment allows that at any time Cemex reports a consolidated leverage ratio of 3.75 times or less for two consecutive quarterly periods, the automatic release of the liens on the collateral securing debt under the facilities agreement will be triggered.

The terms of the indentures governing Cemex’s senior secured notes, which were also secured by liens on the same collateral, also contain an automatic release of those liens when the collateral is released under the facilities agreement.

Because Cemex reported a consolidated leverage ratio of 3.75 times or less for the quarterly periods ended on March 31, 2021 and June 30, the company has complied with all requirements for the automatic release of the liens on the collateral securing its indebtedness under the agreement and, in turn, its senior secured notes that benefited from the same collateral.

That collateral consisted of the shares of Cemex Operaciones Mexico, SA de CV, Cemex Espana, SA and Cemex Innovation Holding Ltd. The senior secured notes issued by Cemex that previously benefitted from the collateral are the following:

• 2¾% euro-denominated senior secured notes due 2024;

• 3 1/8% euro-denominated senior secured notes due 2026;

• 5.45% dollar-denominated senior secured notes due 2029;

• 7 3/8% dollar-denominated senior secured notes due 2027;

• 5.2% dollar-denominated senior secured notes due 2030; and

• 3 7/8% dollar-denominated senior secured notes due 2031.

Additionally, the collateral release has caused the automatic termination of the intercreditor agreement governing the rights of some of Cemex and its subsidiaries’ creditors.

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

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