S&P upgrades Cemex

S&P said it raised its global scale ratings on Cemex SAB de CV and its subsidiaries, Cemex España SA, Cemex Mexico SA de CV and Cemex Inc. to BB- from B+.

S&P also raised the national scale ratings on these companies to mxA-/mxA-2 from mxBBB/mxA-2 and raised the global scale issue-level rating on Cemex's senior secured debt to BB- from B+.

S&P also raised the national scale issue-level ratings to mxA- from mxBBB on the company's local currency senior unsecured debt.

The recovery rating on all Cemex’s rated senior debt remains at 3, which indicates that bondholders can expect a meaningful (50%-70%, in the higher band of the range) recovery in the event of a payment default. The outlook is stable.

S&P noted that in the past two years, Cemex has maintained its commitment toward deleveraging its capital structure and improving debt-protection metrics in its pursuit of a stronger financial risk profile. Headwinds stemming from a strong dollar have resulted in a slower-than-expected recovery in Cemex’s credit metrics due to exchange rate volatility that has affected EBITDA and due to its exposure to the dollar-denominated debt, but the company has successfully executed an effective asset divestment plan that has helped raise additional cash to repay debt.

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