CEMEX says that, aligned with its Climate Action strategy and the company’s ultimate vision of a carbon-neutral economy, tranches under the Facilities Agreement amounting to approximately US$3.2bn will incorporate five sustainability-linked metrics, including reduction of net CO2 emissions per cementitious product and power consumption from green energy in cement, among other indicators.
The company adds that its annual performance in respect to these five metrics may result in a total adjustment of the interest rate margin under these tranches of up to plus or minus 5 basis points.
As part of the amendment to the Facilities Agreement that was originated in July 2017, CEMEX is extending approximately US$1.1bn of term loan maturities by 3 years, from 2022 to 2025, and approximately US$1.1bn of commitments under the revolving credit facility by 1 year from 2022 to 2023.
The company will also prepay about US$530m corresponding to the July 2021 amortisation under the Facilities Agreement to those institutions participating in the extension. This transaction improves CEMEX’s debt profile resulting in no relevant debt maturities through July 2023.
Under the amendment, CEMEX is also redenominating approximately US$313m of previous US Dollar exposure under the term loans that are part of the Facilities Agreement to Mexican Pesos, as well as close to US$82m to Euros. Aside from the new Mexican Pesos tranche, which includes a lower interest rate margin grid, pricing for all other tranches is unchanged.
"We are pleased with this transaction, which allows us to improve our debt maturity profile and underscores CEMEX's commitment to sustainability as one of our key strategic pillars," said Maher Al-Haffar, CEMEX chief financial officer. "We are especially proud that this transaction represents one of the largest sustainability-linked loans in the world, and we would like to take this opportunity to thank our bank syndicate for their continued support."
Along with other technical amendments, CEMEX tightened its consolidated leverage ratio covenant under the Facilities Agreement from 7.00x to a limit of 6.25x for the periods ending on September 30, 2020, December 31, 2020 and March 31, 2021.
