Cemex 2009 Annual Report Download - page 8

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STRENGTHENING
our balance sheet
MOVING FORWARD
Completed in the third quarter of 2009, the refinancing of
the majority of our company’s outstanding debt is an im-
portant step in our integrated strategy to strengthen our
balance sheet, reinforce our business model, and take
full advantage of the recovery of the global economy.
The plan’s new debt maturity profile provides us with the
time and flexibility to deleverage our balance sheet—
through cash flow generation, asset sales, equity and
debt issuances, and other capital market initiatives—as
our markets and the financial environment recover.
The financing agreement, with approximately 75 banks
and private placement investors, extends the final maturi-
ties of approximately US$15 billion in syndicated and
bilateral obligations up to February 2014. The refinancing
plan includes the following core terms and conditions:
n We agreed to a revised debt maturity schedule run-
ning through February 2014, with semi-annual amor-
tization requirements prior to the plan’s final maturity.
The debt carries a 450 basis point margin over the
reference rate (LIBOR, Euribor, and TIIE) to our bank
creditors and a fixed rate of 8.91% to our private
placement creditors that represent US$895 million of
the total refinancing package, subject to adjustments.
n We are required to maintain certain consolidated cov-
erage and leverage ratios, starting in June 2010.
Regaining exibility
As a result of the
renancing, we
have lengthened the
company’s debt maturity
prole and put CEMEX in
a much stronger position
to regain its nancial
exibility.
n We agreed to limit our total capital expenditures
(CAPEX), including maintenance and expansion
CAPEX, to US$700 million in 2010 and US$800 million
per year from 2011 through 2013.
n We extended the share pledges required by the
refinancing institutions to our public securities which
carry that contractual right.
We intend to meet the plan’s amortization requirements
prior to its final maturity with funds from a variety of
sources, including our free cash flow from operations,
net cash proceeds from asset sales, and capital market
transactions. Indeed, with the net proceeds from our
global equity offering, the sale of our Australian opera-
tions, and our issuance of notes since the refinancing,
we have already prepaid US$4.8 billion of our outstand-
ing principal under the agreement, achieving its year-end
2010 milestone in advance. As a result of the refinancing
and these related transactions, we have lengthened the
company’s debt maturity profile and put CEMEX in a
much stronger position to regain its financial flexibility.
AVERAGE DEBT LIFE
years
12/08 12/09
2.3
4.2
6