Fitch rates Cemex hybrid B

Fitch Ratings said it assigned a B rating to the benchmark sized perpetual subordinated notes of Cemex, SAB de CV.

“The proposed securities meet Fitch's criteria with regards to subordination, cross defaults, no material covenants, effective maturity of at least five years, ability to defer coupons for at least five years, and no look-back provisions and therefore qualify for 50% equity credit. The proposed issuance is rated two notches below Cemex's issuer default rating (IDR) to reflect higher loss severity and heightened risk of non-performance relative to senior obligations,” the agency said in a press release.

Proceeds will be used to pay $441 million of perpetual securities, which currently do not receive equity credit, and the remainder for general corporate purposes including other debt repayment.

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