Fitch Ratings upgrades Cemex to BB+

Fitch Ratings has upgraded the foreign and local currency Issuer Default Ratings (IDRs) of Cemex to 'BB+' from 'BB', its senior unsecured notes to 'BB+' from 'BB' and its subordinated hybrid issuance to 'BB-' from 'B+'. Cemex's national long-term rating is being upgraded to 'AA-(mex)' from 'A+(mex)', and its national short-term rating is affirmed at 'F1'. The rating outlook is stable.

The upgrade reflects Cemex’s ongoing stronger operating performance which, along with asset sales, has supported effective debt reduction since late 2019. The company has been also improving its debt profile, in terms of maturity, collateral basis and financial costs which translate to better financial flexibility. Fitch expects Cemex to solidly maintain credit metrics below 3.5x in the next 2-3 years while continuing to invest to optimise its portfolio, enhance its business position and advance on its sustainability agenda. 

Cemex's adjusted net debt has been showing a downward trend as it declined to US$7.9bn in 2021 from US$9.4bn in 2020 and US$10.2bn in 2019. Debt reduction in 2021 was primarily driven by the sale of carbon credits for approximately US$550m, FCF and US$500m of equity credit from hybrid security issued in June 2021. Fitch expects Cemex to solidly maintain net debt/EBITDA ratios below 3.5x in the next 2-3 years, with net leverage projected to be 3.1x in 2022 and 2.8x in 2023.