Cemex 2009 Annual Report Download - page 60

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As of December 31, 2009 and 2008, consolidated debt according to the type of instrument in which it was negotiated is summarized as follows:
2009 Short-term Long-term 2008 Short-term Long-term
Bank loans Bank loans
Lines of credit in Mexico $ – – Lines of credit in Mexico $ 8,215 –
Lines of credit in foreign countries 2,275 – Lines of credit in foreign countries 28,054 –
Syndicated loans, 2010 to 2014 – 100,594 Syndicated loans, 2009 to 2012 – 94,189
Other bank loans, 2010 to 2014 – 37,189 Other bank loans, 2009 to 2013 – 66,296
2,275 137,783 36,269 160,485
Notes payable Notes payable
Euro medium term notes, 2010 to 2014 – 16,866 Euro medium term notes, 2009 to 2014 – 18,130
Medium-term notes, 2010 to 2017 – 50,396 Medium-term notes, 2009 to 2017 – 38,134
Other notes payable 1,177 2,647 Other notes payable 1,640 3,416
1,177 69,909 1,640 59,680
Total bank loans and notes payable 3,452 207,692 Total bank loans and notes payable 37,909 220,165
Current maturities 3,941 (3,941) Current maturities 57,360 (57,360)
$ 7,393 203,751 $ 95,269 162,805
Relevant transactions during 2009 and 2008
As detailed at the end of the note 13A, on August 14, 2009, CEMEX entered into the Financing Agreement with its major creditors. The Financing Agreement
extended the maturity of approximately US$14,961 ($195,839) in syndicated and bilateral loans, private placement obligations and other obligations. The
Financing Agreement included the portion of short-term debt as of December 31, 2008 that was previously extended in January 2009.
On December 14, 2009, CEMEX issued U.S. dollar-denominated notes for US$1,250, which mature in 7 years and pay an annual coupon of 9.5%, as well
as euro-denominated notes for €350 (US$501), which mature in 8 years and pay an annual coupon of 9.625% (note 23). The proceeds obtained from the
offerings were mainly used to prepay principal outstanding maturing in 2011 under the Financing Agreement detailed in this note.
On December 10, 2009, CEMEX completed its offer to exchange CBs issued in Mexico with maturities between 2010 and 2012, into mandatorily convertible
securities for approximately $4,126 (US$315). At their mandatory scheduled conversion in ten years or earlier if the price of the CPO reaches $35.88, the
securities will be mandatorily convertible into approximately 172.5 million CPOs, at a conversion price of $23.92 per CPO. During their tenure, the securities
yield a 10% interest payable quarterly. Holders have an option to voluntarily convert their securities, after the first anniversary of their issuance, on any
interest payment date into CPOs. Based on MFRS, the convertible securities represent a compound instrument which has a liability component and an
equity component. The liability component, which amounted to $2,090, represents the net present value of interest payment on the principal amount,
without assuming any early conversion, and was recognized within “Other financial obligations.” The equity component, which represents the difference
between the principal amount and the liability component was recognized within “Other equity reserves” net of commissions (note 17B).
In June 2008, CEMEX closed two US$525 facilities with a group of banks. Upon origination, each facility allowed the principal amount to be automatically
extended for consecutive six-month periods indefinitely after a period of three years, including an option of CEMEX to defer interest at any time (with certain
limitations). The facilities were treated as equity instruments, in the same manner as CEMEX’s outstanding perpetual debentures described in note 17D.
In December 2008, as a result of negotiations with banks intended to obtain certain modifications in the credit contracts related to other debt transactions
described in note 13A, CEMEX exercised the option to convert these two US$525 facilities into credit contracts without the option to differ interest and the
payment of principal under such facilities, which eliminated the equity treatment of these facilities prospectively. As of December 31, 2009 and 2008, the
notional amount of these facilities, which mature in 2014, was included within debt in the balance sheet and was part of the Financing Agreement.
The most representative exchange rates for the financial debt as of December 31, 2009 and 2008 and as of January 29, 2010 are as follows:
As of January 29,
2010 2009 2008
Mexican pesos per dollar 13.09 13.09 13.74
Euros per dollar 0.7210 0.6985 0.7154
Pounds sterling per dollar 0.6248 0.6191 0.6853
Japanese yen per dollar 90.29 92.97 90.75
Changes in consolidated debt as of December 31, 2009, 2008 and 2007 are as follows:
2009 2008 2007
Debt at beginning of year $ 258,074 216,895 88,331
Proceeds from new debt instruments 40,223 59,568 206,690
Debt repayments (76,035) (63,179) (84,412)
Exchange of debt into convertible securities (4,126) – –
Increase (decrease) from business combinations – (776) 13,927
Foreign currency translation and inflation effects (6,992) 45,566 (7,641)
Debt at end of year $ 211,144 258,074 216,895