TEXT-S&P puts CEMEX 'B-' credit rating on watch positive

Fri Dec 7, 2012 5:42pm EST

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Overview
     -- Mexico-based cement producer CEMEX successfully executed its liability 
management and asset sales plan, which resulted in an extended debt maturity 
profile and additional liquidity.
     -- The company's operating performance remains on a positive trend and we 
expect profitability and cash flow generation to improve further in 2013.
     -- We are placing our ratings, including the 'B-' global scale and 
'mxBB/mxB' national scale corporate credit ratings, on CEMEX on CreditWatch 
with positive implications.
     -- We expect to resolve the CreditWatch during the next 30 days, after an 
analysis of CEMEX's projected operating performance for 2013-2015.


Rating Action
On Dec. 7, 2012, Standard & Poor's Ratings Services placed its ratings, 
including the 'B-' global scale and 'mxBB/mxB' national scale corporate credit 
ratings, on CEMEX S.A.B. de C.V.  and its key operating
subsidiaries--CEMEX Espana S.A., CEMEX Mexico S.A. de C.V., Cemex Corp., and and
CEMEX Inc.-- on CreditWatch with positive implications.

Rationale
The CreditWatch listing reflects CEMEX's extended debt maturity profile and 
additional liquidity following the successful execution of its liability 
management and asset sales plan. Also, it reflects the company's improved 
operating performance and gradual recovery in most of its major markets, 
resulting in sustained EBITDA growth during the past five quarters and higher 
operating margins.

On Oct. 4, 2012, CEMEX issued $1.5 billion in bonds due 2022 to prepay 
principal outstanding under the new Facilities Agreement, allowing the company 
to satisfy the March 31, 2013, $1.0 billion payment and the Feb. 14, 2014, 
$500 million amortization payment, which addressed the company's short-term 
risk. In addition, on Nov. 6, 2012, CEMEX raised approximately $1.1 billion 
through the sale of a minority stake of its Central and South American 
operations (CEMEX Latam), excluding its Mexican operations, which further 
reduced the company's debt and increased liquidity. 

Our ratings on Cemex and its key subsidiaries are still constrained by its 
"highly leveraged" financial risk profile, and reflect our assessment of the 
company's "satisfactory" business risk profile and "adequate" liquidity.

CEMEX's "satisfactory" business risk profile mainly reflects its leading 
position in the global cement, concrete, aggregates, and ready-mix businesses. 
We have equalized the ratings on CEMEX Mexico, CEMEX Inc., and CEMEX Espana 
because of the strategic importance of each of these subsidiaries to the group.

For the nine months ended Sept. 30 2012, CEMEX's financial performance started 
to reflect gradual recovery in the demand for cement, particularly from the 
U.S. market. Also, CEMEX has been able to alleviate some of its operating 
pressures, through cost-reduction initiatives, resulting in EBITDA margins 
approaching 16%. For the 12 months ended Sept. 30, 2012, the company posted 
adjusted total debt to EBITDA of 8.5x, EBITDA interest coverage of 1.6x, and 
funds from operations to total debt of 4.8%. These ratios compare favorably 
with those for the same period a year earlier of 10.6x, 1.5x, and 2.1%, 
respectively.

CreditWatch
We will resolve the CreditWatch listing within the next 30 days, after 
completing a detailed analysis of CEMEX's projected operating performance for 
2013-2015 to determine if it can achieve improved credit metrics, commensurate 
with a higher rating. We expect to raise the ratings by one notch, and a key 
factor for an upgrade will be our assessment that CEMEX can maintain its 
operating performance and liquidity for the next two years, even under 
volatile economic conditions.

Related Criteria And Research
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Corporate Ratings Criteria 2008, April 15, 2008

Ratings List
Ratings Affirmed; CreditWatch/Outlook Action
                                        To                 From
CEMEX S.A.B. de C.V.
CEMEX Mexico S.A. de C.V.
 Corporate Credit Rating                B-/Watch Pos/--    B-/Stable/--
 Caval - Mexican Rating Scale           mxBB/Watch Pos/mxB mxBB/Stable/mxB

CEMEX Corp.
 Corporate Credit Rating                B-/Watch Pos/NR    B-/Stable/NR

CEMEX Espana S.A.
CEMEX Inc.
 Corporate Credit Rating                B-/Watch Pos/--    B-/Stable/--

CEMEX S.A.B. de C.V.
 Senior Secured                         B-/Watch Pos       B-
   Recovery Rating                      3                  3
 Senior Unsecured                       mxBB/Watch Pos     mxBB
 Subordinated                           mxB+/Watch Pos     mxB+
 Commercial Paper                       mxB/Watch Pos      mxB

C10 Capital Ltd.
 Senior Unsecured                       CCC+/Watch Pos     CCC+

C10-EUR Capital (SPV) Limited
 Senior Unsecured                       CCC+/Watch Pos     CCC+

C5 Capital Ltd.
 Senior Unsecured                       CCC+/Watch Pos     CCC+

C8 Capital Ltd.
 Senior Unsecured                       CCC+/Watch Pos     CCC+

CEMEX Espana S.A.
 Senior Secured                         B-/Watch Pos       B-
   Recovery Rating                      3                  3


CEMEX Finance Europe B.V.
 Senior Unsecured                       B-/Watch Pos       B-
  Recovery Rating                       3                  3


CEMEX Finance LLC
 Senior Secured                         B-/Watch Pos       B-
  Recovery Rating                       3                  3


CEMEX Materials LLC.
 Senior Unsecured                       B-/Watch Pos       B-
  Recovery Rating                       3                  3

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
FILED UNDER:
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