Creditors in $7 Billion CEMEX Refinancing

September 17, 2012

On September 17, CEMEX successfully completed the refinancing of its Financing Agreement, dated as of August 14, 2009 (as amended), comprising approximately $7 billion of bank and private placement debt.

Cleary Gottlieb advised the steering committee of CEMEX‚Äôs largest bank creditors, including Banco Bilbao Vizcaya Argentaria, Banco Santander, BNP Paribas, Bank of America Merrill Lynch, Citigroup Global Markets, HSBC Bank, J. P. Morgan Chase Bank and The Royal Bank of Scotland, which together represented approximately 50% of the exposures under the 2009 debt. In addition, Cleary Gottlieb represented the structuring agents on the exchange offer and consent solicitation pursuant to which the transaction was completed.

The transaction employed a novel structure whereby participating creditors that originally held bank loans under syndicated facilities governed by both English and New York law, promissory notes governed by either New York law or both New York and Mexican law, and/or private placement notes extinguished their prior debts pursuant to a deed, in exchange for $6.2 billion in new similar debt instruments maturing in 2017 or, at their option and subject to pro ration in certain circumstances, $500 million in new 9.5% senior secured notes due 2018. Approximately 100 creditors participated in the transaction, resulting in an exchange of approximately 92.7% of the 2009 debt.

The transaction was unusual because it included a consent solicitation of creditors that eliminated certain creditor protections from non-participating creditors, a technique traditionally employed in capital markets liability management transactions. It also included an early bird priority allocation mechanism which was built-in to ensure that investors that wanted more liquid instruments would be able to obtain them.

As of December 31, 2011, the Mexican company CEMEX is one of the largest cement companies in the world, based on annual installed cement production capacity of approximately 94.8 million tons, and the largest ready-mix concrete company worldwide, with annual sales volumes of approximately 55 million cubic meters million cubic meters. CEMEX primarily engages in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates and clinker.

Cleary Gottlieb has been counsel in a number of CEMEX related matters, including as counsel to the bank steering committee in connection with the 2009 Financing Agreement and, since 2009, as counsel to initial purchasers in connection with the issuance of approximately $7 billion in high yield bonds and convertible notes.