CEMEX, S.A.B. de C.V. (“CEMEX”) announced today that it has successfully closed a new $3.25 billion syndicated credit agreement (the “Credit Agreement”) and used the proceeds to fully repay its previous facilities agreement.
The new Credit Agreement consists of a $1.5 billion 5-year amortizing Term Loans and a $1.75 billion 5-year committed Revolving Credit Facility. The committed facility is roughly $600 million higher than the previous facilities agreement, resulting in a stronger liquidity position which is favorable 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 (the “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 5 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.”