Cemex to sell up to $1.5 billion in perpetual bonds issued by BVI-incorporated Special Purpose Vehicles
Cemex, the world’s third-largest cement maker plans to sell up to $1.5 billion in fixed-to-floating rate perpetual callable securities, according to Fitch Ratings. As it was stated on Monday, this debt will be sold in two tranches, and issued by special purpose vehicles incorporated with limited liability in the British Virgin Islands. Their assets in the amount of $1.5 billion consist of perpetual dual currency notes issued by New Sunward Holding Financial Ventures (NSHFV), which will be purchased by the issuer or issuers with proceeds from the debentures. The debentures will be secured by a first priority security interest in the dual currency notes.
According to Fitch, the perpetuals will have no fixed maturity date and interest due on any payment date may be deferred by the issuer indefinitely. If the debt is not called, the perpetual notes are expected to have coupons of 3 percentage points over the three-month London interbank offered rate, and will be sold in the next week, according to a source familiar with the deal.
NSHFV is an indirect wholly owned special purpose subsidiary of Cemex, S.A.B. de C.V. (Cemex). NSHFV’s obligations under the dual currency notes will be unconditionally guaranteed on a joint and several basis by Cemex and its subsidiaries Cemex Mexico S.A. de C.V. (Cemex Mexico) and New Sunward Holding B.V. (New Sunward) (the guarantors).
Cemex is the third-largest cement producer in the world based on production capacity of approximately 97 million metric tons in more than 50 countries. During 2005, revenues and EBITDA reached US$15.3 billion and US$3.6 billion, respectively, and the largest contributors to cash flow were as follows: Mexico, 33%; the United States, 27%; and Spain, 11%. Approximately 85% of consolidated EBITDA was earned from investment-grade countries.