Cemex 2012 Annual Report Download - page 78

Notes to the
consolidated
financial
statements
78
< previous I contents I next >
Relevant debt transactions during 2012, 2011 and 2010
On September 17, 2012, CEMEX concluded the refinancing process of a substantial portion of its then outstanding debt under the
Financing Agreement, as amended on several dates during 2009, 2010, 2011 and finally on September 17, 2012 (the “Financing
Agreement”), with the completion of the Exchange Offer on September 17, 2012, as further described in this note 16.
On September 17, 2012, in connection with the Facilities Agreement described elsewhere in this note 16A, CEMEX issued
US$500 aggregate principal amount of 9.5% senior secured notes due in 2018 (the “September 2012 Notes”). The September
2012 Notes were issued in exchange for loans and private placements outstanding under the Financing Agreement.
On October 12, 2012, through its subsidiary CEMEX Finance LLC, CEMEX closed the offering of US$1,500 aggregate principal
amount of 9.375% senior secured notes due in 2022 (the “October 2012 Notes”). The October 2012 Notes, which were issued at
par and will be callable commencing on their 5th anniversary, are unconditionally guaranteed by CEMEX, S.A.B. de C.V., CEMEX
México, S.A. de C.V., CEMEX España, S.A., New Sunward Holding B.V., CEMEX Concretos, S.A. de C.V., CEMEX Corp. and Empresas
Tolteca de México, S.A. de C.V., as well as by CEMEX Research Group AG, CEMEX Shipping B.V., CEMEX Asia B.V., CEMEX France
Gestion (S.A.S.), CEMEX UK, and CEMEX Egyptian Investments B.V. ( jointly the “New Guarantors”), which also guarantee debt
under the Facilities Agreement. The net proceeds from the offering, approximately US$1,489, were used to repay indebtedness
under the Facilities Agreement, which allowed CEMEX to achieve the first debt repayment milestone thereunder of March 2013
and the reduction in the interest rate under such agreement by 25 basis points, as detailed in other section of this note 16A.
On March 23, 2012, through several exchange offers made on a private placement basis by CEMEX España’s Luxembourg branch,
CEMEX finalized the issuance of: a) approximately €179 aggregate principal amount of 9.875% Euro-denominated senior secured
notes due 2019; and b) approximately US$704 aggregate principal amount of 9.875% Dollar-denominated senior secured notes
due 2019 (collectively, the “March 2012 Notes”), in exchange for approximately €470, or 53%, of its then outstanding Euro-
denominated 4.75% notes due 2014, and approximately US$452, or 48%, in several series of its then aggregate outstanding
perpetual debentures (note 20D). The March 2012 Notes are unconditionally guaranteed by CEMEX, S.A.B. de C.V., CEMEX
México, S.A. de C.V., New Sunward Holding B.V. and the New Guarantors and share the same collateral that secures the Facilities
Agreement and other senior secured debt having the benefit of such collateral. As a result of the private exchanges, CEMEX
generated in 2012 a gain of approximately US$131 ($1,680), representing the difference between the notional amount of the
March 2012 Notes, and the several series of the reacquired and cancelled perpetual debentures, which was recognized within
“Other equity reserves.”
During December 2011, CEMEX exchanged through market transactions a portion of the PDVSA notes received in payment
from the Government of Venezuela (note 13B), for perpetual debentures and debt instruments issued by CEMEX subsidiaries. In
addition, during the same month, CEMEX received from a third party, as a settlement of an account receivable, the equity interest
of an entity whose assets where mainly comprised by perpetual debentures and debt instruments issued by CEMEX subsidiaries.
As a result, as of December 31, 2011, CEMEX cancelled in its balance sheet a portion of several series of its subsidiaries’ debt
instruments, held by the newly acquired entity and its other subsidiaries, for an aggregate notional amount of approximately
$977, including portions of the 9.25% Dollar-denominated senior secured notes due 2020 and portions of the April 2011 Notes,
described below, as well as portions of several series of perpetual debentures (note 20D) for an aggregate notional amount of
approximately $3,029, among others. Considering the difference between the fair value of the instruments and their notional
amount, as part of this cancellation, CEMEX recognized gains, net of certain commissions, of approximately $1,630, of which,
approximately $239 associated with CEMEX’s debt instruments, were recognized within other expenses, net, and approximately
$1,391 associated with the perpetual debentures, were recognized in stockholders’ equity as part of other equity reserves.
As of December 31, 2010 and 2011, in connection with its obligations under the Financing Agreement, which is described
within this note 16A, CEMEX had already paid 35.4% of the original principal amount, or approximately US$5,263, of debt under
the Financing Agreement and 51.0% of the original principal amount, or approximately US$7,571, of debt under the Financing
Agreement, respectively. These repayments exceeded the scheduled amortizations of 19.1%, or approximately US$2,837 by
December 15, 2010, and 33.1%, or approximately US$4,918 by December 15, 2011. Through these repayments, CEMEX
avoided a 0.5% increase in the interest rate of debt under the Financing Agreement beginning in January 2012 and addressed all
maturities under the Financing Agreement until December 2013.