Cemex 1997 Annual Report Download - page 45

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39
also the option of exchanging the CEP for long-
term notes.
• In recognition of CEMEX’ business strategy and
its improved financial structure, Standard &
Poors (S&P) rating agency improved its rating
of CEMEX’ international debt in November
1997. The S&P rating for CEMEX’ foreign cur-
rency debt is BB+, which is higher than the BB
rating given by S&P to Mexican sovereign debt.
Equity Transactions
•At the 1996 General Annual Stockholders
Meeting held on April 24, 1997, the stockhold-
ers approved the CEMEX Share Repurchase
Program. On March 30, the Board of Directors
of CEMEX approved the repurchase. As of
December 31, 1997, approximately 24 million
shares have been repurchased at the approxi-
mate average price of $39 nominal pesos per
share, completing the minimum stipulated for
the Share Repurchase Program. CEMEX has
funded this program with its own resources
generated by its existing operations.
• In 1995, the company instituted the Options
Leverage
Total debt/
Total capitalization
During 1997, leverage
declined as CEMEXÕ debt
decreased.
Debt/Operating
cash flow
Even with the rise in cash
from operations, the debt-to-
EBITD ratio decreased gradually.
Trailing 12 months for each period.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
the two-year US Commercial Paper Program for
US$300 million.
This is the first time that the program has been
renewed for a period of two years, and, there-
fore, its original maturity was extended for
another year. The structure of the program,
backed by a letter of credit from CS First
Boston, has allowed CEMEX to obtain an invest-
ment grade credit rating of A1/P1. The compa-
ny will use the resources from this program to
refinance short-term maturities. Bank of
America acted as leader and managing agent for
the transaction that was syndicated among 22
international banks.
• In November, CEMEX negotiated a Contingent
Line with Bankers Trust and with Santander for
US$300 million, which provides contingent
financing for a period of 3 years to refinance the
Commercial Euro-Paper (CEP). In the event of
adverse market conditions for refinancing the
CEP, CEMEX has the option of placing the CEP
with the participant banks. Additionally, there is