Cemex 2012 Annual Report Download - page 80

Notes to the
consolidated
financial
statements
80
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On September 17, 2012, CEMEX completed a refinancing process of a substantial portion of its then outstanding debt under the
Financing Agreement, as amended on several dates. Pursuant to CEMEX’s exchange proposal (the “Exchange Offer”), creditors were
invited to exchange their existing exposures under the existing Financing Agreement into one or a combination of the following
instruments: a) new loans (“New Loans”) or private placement notes (“New USPP Notes”), as applicable, or b) up to US$500 in
new 9.5% notes (the “September 2012 Notes”) to be issued by CEMEX maturing in June 2018, having terms substantially similar
to those of senior secured notes previously issued by CEMEX, S.A.B. de C.V. and/or its subsidiaries. The September 2012 Notes
were allocated pro rata to the participating creditors of the Financing Agreement in the Exchange Offer that elected to receive
the September 2012 Notes in the Exchange Offer. Financing Agreement creditors accepting certain amendments, including the
elimination of the benefit of the security package among others, received an amendment fee of 20 basis points (“bps”) calculated
on the amount of their existing exposures under such agreement.
Pursuant to the Exchange Offer, participating creditors representing approximately 92.7% of the aggregate principal amount of
debt outstanding under the existing Financing Agreement agreed to extinguish their existing loans and private placement notes
and to receive in place thereof: a) approximately US$6,155 in aggregate principal amount of New Loans with an initial interest
rate of LIBOR plus 525 bps (subject to decrease depending on certain prepayments), and new USPP Notes with an initial interest
rate of 9.66% (subject to decrease depending on certain prepayments), issued pursuant to a new agreement (the “Facilities
Agreement”) dated as of September 17, 2012, and with a final maturity on February 14, 2017, and an exchange fee of 80 bps
calculated on the amount of their existing exposures under the Financing Agreement that were extinguished and for which New
Loans or New USPP Notes were issued in place thereof; and b) US$500 of the September 2012 Notes, issued pursuant to an
indenture dated as of September 17, 2012. Approximately US$525 aggregate principal amount of loans and U.S. Dollar private
placement notes remained outstanding after the Exchange Offer under the existing Financing Agreement, as amended, after the
Exchange Offer. As of December 31, 2012, after the application of proceeds resulting from the CEMEX Latam Holdings, S.A. initial
offering (note 20D), the aggregate principal amount of loans and U.S. dollar private placement notes under the amended Financing
Agreement was US$55 ($707), with a final maturity on February 14, 2014.
The Facilities Agreement required CEMEX to make the following amortization payments: (i) US$500 on February 14, 2014, (ii)
US$250 on June 30, 2016, and (iii) US$250 on December 31, 2016. The Facilities Agreement also provides that CEMEX must:
(a) repay at least US$1,000 of the indebtedness under the Facilities Agreement on or prior to March 31, 2013 (or a date falling
no more than 90 days thereafter, if agreed to by two thirds of the participating creditors under the Facilities Agreement), or the
maturity date of the indebtedness under the Facilities Agreement will become due on February 14, 2014; (b) on or before March
5, 2014, in case CEMEX does not redeem, purchase, repurchase, refinance or extend the maturity date of 100% of the notes
issued by CEMEX Finance Europe B.V. and guaranteed by CEMEX España to a maturity date falling after December 31, 2017,
or the maturity date of the indebtedness under the Facilities Agreement will become March 5, 2014; (c) on or before March 15,
2015, in case CEMEX does not redeem, convert into equity, purchase, repurchase, refinance or extend the maturity date of 100%
of the 2015 Convertible Subordinated Notes to a maturity date falling after December 31, 2017, or the maturity date of the
indebtedness under the Facilities Agreement will become March 15, 2015; (d) on or before September 30, 2015, in case CEMEX
does not redeem or extend the maturity date of 100% of the April 2011 Notes to a maturity date falling after December 31,
2017, or the maturity date of the indebtedness under the Facilities Agreement will become September 30, 2015; (e) on or before
March 15, 2016, in case CEMEX does not redeem, convert into equity, purchase, repurchase, refinance or extend the maturity
date of 100% of the 2016 Convertible Subordinated Notes to a maturity date falling after December 31, 2017, or the maturity
date of the indebtedness under the Facilities Agreement will become March 15, 2016; and (f) on or before December 14, 2016, in
case CEMEX does not redeem or extend the maturity date of 100% of the December 2009 Notes to a maturity date falling after
December 31, 2017, or the maturity date of the indebtedness under the Facilities Agreement will become December 14, 2016.
For the initial US$1,000 repayment, at its sole discretion, CEMEX may elect to: a) sell minority stakes in CEMEX’s operations;
b) sell selected assets in the United States; c) sell selected assets in Europe; and/or d) sale of other non-core assets. If during
the Facilities Agreement term CEMEX pays down US$1,500 and US$2,000 of aggregate principal amount under the Facilities
Agreement, the interest rate under the outstanding amount of the New Notes would be reduced to LIBOR plus 500 bps and LIBOR
plus 450 bps, respectively, and in the New USPP Notes would be reduced to 9.41% and 8.91%, respectively.
As of December 31, 2012, CEMEX achieved the US$1,000 repayment milestone of March 2013, and the debt amortization
requirements under the Facilities Agreement through and including the amortization on December 15, 2016; with US$4,187
remaining outstanding with a final maturity in February 2017. As a result of the prepayments, the interest rate on the New Loans
under the Facilities Agreement was reduced to LIBOR plus 450 bps and on the New USPP Notes was reduced to 8.91%.