CEMEX SAB de CV (CX) has priced its $650 million 4.875% convertible subordinated notes due in 2015. The early buyer of the notes was also allowed a 30-day over-allotment option for additional purchase up to $65 million of the principal amount of notes. The offer is expected to close by the end of March 2010.
The notes will be converted into American Depositary Shares (ADS) at a conversion rate of 73.54 ADSs per $1,000 principal amount of notes, equivalent to approximately $13.60 per ADS.
Interest on notes will be payable beginning Sep 15, 2010 semi-annually. The notes will mature on Mar 15, 2015.
The net proceeds from the offering of the notes are expected to be used for general corporate purposes and debt repayment.
This offering marks another milestone in CEMEX’s efforts to regain financial flexibility. Other such milestones include the completion of the refinancing of $15 billion of its outstanding debt and the issuance of close to $2.3 billion in notes, including $500 million last month. Additionally, CEMEX has raised $2.2 billion in equity and mandatorily convertible securities and sold its Australian operations to Holcim for $1.7 billion.
Net debt at the end of the fourth quarter was $15,053 million, representing a decrease of $2,032 million from the previous quarter.
Although, CEMEX is making genuine efforts to reduce operating costs and net debt, the continued weak cement volumes in Spain and U.S. remain a problem. Moreover, the overall economic situation is still uncertain.
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