Fitch Rates Cemex's Proposed Senior Secured Notes 'B+/RR3'

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned a rating of 'B+/RR3' to the proposed $500 million private placement of Cemex Finance LLC. These senior secured notes, which are scheduled to mature in 2016, will have the same security package as the bank debt that was refinanced in August. They will be unconditionally guaranteed by Cemex, S.A.B. de C.V. (Cemex) and its subsidiaries Cemex Mexico, S.A. de C.V., Cemex Espana, S.A., Cemex Corp., Cemex Concretos, S.A. de C.V., Empresas Toltec de Mexico, S.A. de C.V. and New Sunward Holding B.V. Proceeds from the issuance will be used to refinance existing debt and to fund working capital needs.

Fitch currently rates Cemex and its subsidiaries as follows:

Cemex

--Foreign currency Issuer Default Rating (IDR) at 'B';

--Local currency IDR at 'B';

--Long-term national scale rating at 'BB-(mex)';

--MXN5 billion Certificados Bursatiles program at 'BB-(mex)';

--MXN30 billion Programa Dual Revolvente de Certificados Bursatiles program at 'BB-(mex)';

--Senior unsecured debt obligations at 'B+/RR3';

--Unsecured debt issued through the Certificados Bursatiles program at 'BB-(mex)';

--Short-term national scale rating at 'B(mex)';

--MXN2.5 billion short-term portion of Programa Dual Revolvente de Certificados Bursatiles program at 'B(mex)'.

Cemex Espana S.A. (Cemex Espana)

--IDR at 'B';

--Senior unsecured debt obligations at 'B+/RR3'.

Rinker Materials Corporation

--USD150 million senior unsecured notes due 2025 at 'B+/RR3'.

The Rating Outlook for these rating is Stable.

The 'B' ratings of Cemex and its subsidiaries take into consideration Cemex's strong global business position as an integrated cement player and its ability to continue to generate free cash flow during the sharp contraction in its key markets. The ratings also continue to reflect the support the company receives from its key banks. Balanced against these credit strengths are the high level of leverage at Cemex and a challenging debt amortization schedule during 2011 and 2012. The proposed notes have been rated 'B+' to reflect good recovery prospects ('RR3') in the event of a default.

Cemex had $22.1 billion of lease adjusted debt and $488 million of cash and marketable securities as of Sept. 30, 2009. The company's net debt declined to approximately $19.9 billion from $21.6 billion on Oct. 1, 2009 following the completion of the sale of its Australian operations to Holcim. Excluding the cash flow associated with Australian assets that were sold to Holcim, Fitch projects that Cemex will generate about $3.2 billion of adjusted EBITDAR during 2009. These figures translate to an adjusted net debt/EBITDAR ratio of 6.2 times (x).

Cemex has improved its debt amortization profile significantly through an August debt refinancing agreement, the issuance of $1.9 billion of equity during September and the sale of the Australian assets. The company's debt amortizations schedule is manageable through the end of 2010 with $750 million of total debt maturities. In 2011 and 2012, the company's debt amortizations increase to $2.6 billion and $1.6 billion, respectively.

The outlook for growth of Cemex's operating cash flow during 2010 remains modest, as it depends primarily upon a rebound in demand in three of the company's key markets - the United States, Spain and the U.K. While demand for new houses is expected to remain weak in these markets, infrastructure spending associated with economic stimulus packages could boost cash flows from very depressed levels. Cemex should be able to reduce debt by more than $1.5 billion per year during the next two years, as its current bank agreement limits capital expenditures to $700 million in 2010 and $800 million in 2011.

Additional information is available at www.fitchratings.com.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.