Cemex 2009 Annual Report Download - page 61

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The maturities of consolidated long-term debt as of December 31, 2009, which reflect the amortization of debt under the Financing Agreement, are as
follows:
2009
2011 $ 18,021
2012 19,040
2013 32,133
2014 108,784
2015 and thereafter 25,773
$ 203,751
As of December 31, 2009, CEMEX has the following lines of credit, the majority of which are subject to the banks’ availability, at annual interest rates
ranging between 1.3% and 12.0%, depending on the negotiated currency:
Lines of
credit Available
Other lines of credit in foreign subsidiaries $ 5,331 1,251
Other lines of credit from banks 131 –
$ 5,462 1,251
Financing Agreement
On January 27, 2009, as a starting point for the subsequent global renegotiation of its principal credit facilities, CEMEX and its creditors agreed to:
a) extend until February 2011 its short-term bilateral loans for approximately US$2,314, including amortizations of US$607 in 2009 and US$536 in 2010;
b) extend until December 2010, US$1,700 principal amount of the syndicated loan facility of US$3,000 negotiated for the Rinker acquisition, which had
been originally due in December 2009; and c) modify the consolidated leverage ratio, among other conditions, of several syndicated loans. This agreement
was concluded on December 19, 2008 and is further described in this note 13A.
On March 9, 2009, CEMEX initiated negotiations with its core bank lenders in order to extend the maturity of approximately US$15,000 in syndicated and
bilateral loans, as well as private placement obligations, under the Conditional Waiver and Extension Agreement (“CWEA”). CEMEX entered into the CWEA
to have time to negotiate the comprehensive Financing Agreement. While the discussions were ongoing, CEMEX met its interest payment obligations
under both its bank and capital markets debt. The lenders party to the CWEA agreed to extend to July 31, 2009, the date by which the Financing Agreement
was expected to be completed, scheduled principal payment obligations which were originally due between March 24, 2009 and July 31, 2009. The term
of the CWEA was subsequently extended to August 14, 2009 in order to complete the Financing Agreement. Completion of the comprehensive Financing
Agreement required consent from all the lenders party to the CWEA. During 2009, certain consolidated entities, including CEMEX, S.A.B. de C.V. and
CEMEX España, S.A., operated under the CWEA with their lenders through August 14, 2009.
On August 14, 2009, upon completion of necessary documentation and satisfaction of conditions precedent, CEMEX entered into the Financing Agreement
with its major creditors, by means of which the maturities of approximately US$14,961 ($195,839) in syndicated and bilateral loans, private placements and
other obligations were extended, providing for a semi-annual amortization schedule. As of December 31, 2009, after the application of the net proceeds
obtained from the sale of assets in Australia, the equity offering (note 17A), and the issuance of dollar and euro-denominated notes described above, there
was a remaining debt balance under the Financing Agreement of $141,621 (US$10,819), with payments due for approximately US$764 in December 2011,
US$794 in 2012, US$2,393 in 2013 and US$6,868 in 2014.
Under the Financing Agreement, in addition to several covenants and restrictions and subject in each case to the permitted negotiated amounts and
other exceptions, including but not limited to incurring debt, granting security, engaging in acquisitions and joint ventures, granting guarantees, declaring
and paying cash dividends and making other cash distributions to stockholders, CEMEX became obligated to several financial ratios and tests described
below.
The Financing Agreement requires, in addition to the predefined debt amortization, the application of cash on hand for any period for which it is being
calculated in excess of US$650 to prepay debt. Pursuant to the Financing Agreement, CEMEX is prohibited from making aggregate capital expenditures
in excess of US$600 in 2009 (plus an additional 50 million U.S. dollars contingency to account for currency fluctuations and certain additional costs and
expenses), US$700 in 2010 and US$800 for each year after 2011 until debt under the Financing Agreement has been repaid in full.
Covenants
Most debt contracts of CEMEX, S.A.B. de C.V. contain restrictive covenants calculated on a consolidated basis requiring, among others, the compliance
with financial ratios, which mainly include: a) the ratio of net debt to operating EBITDA (“leverage ratio”); and b) the ratio of operating EBITDA to financial
expense. Financial ratios are calculated according to formulas established in the debt contracts using definitions that differ from terms defined under MFRS.
These financial ratios require in most cases, pro forma adjustments. Beginning on August 14, 2009, even though the financial ratios under the Financing
Agreement use similar terminology, they are calculated differently as compared to the financial ratios effective until December 31, 2008 and before the
completion of the Financing Agreement.
Upon completion of the Financing Agreement, CEMEX agreed to comply with several financial ratios and tests, including a consolidated ratio of operating
EBITDA to financial expense of not less than: (i) 1.75 times for each semi-annual period beginning on June 30, 2010 through the period ending on
June 30, 2011; (ii) 2.0 times for each semi-annual period through the period ending on December 31, 2012; and (iii) 2.25 times for the subsequent semi-
annual periods until December 31, 2013. In addition, the Financing Agreement allows CEMEX a maximum consolidated leverage ratio for each semi-annual
period beginning on June 30, 2010 of 7.75 times, decreasing gradually in subsequent semi-annual periods until reaching 3.50 times for the period ending
December 31, 2013. As of December 31, 2009, such financial ratios under the Financing Agreement were not applicable.