Cemex markets green perp

Published 8 March 2023, 16:10

Mexican cement producer Cemex is meeting with fixed-income investors this week ahead of a possible sale of perpetual US dollar green bonds that would be the first international debt offering from a Latin American company in about a month.

BBVA, BNP Paribas, Bank of America, IMI-Intesa Sanpaolo and JP Morgan have been holding meetings since Monday for the possible sale of a benchmark-sized non-call 5.25 green perp. A person familiar with the deal said the deal could price as early as Thursday, depending on market conditions.

Approximately 100 investors have expressed interest in the bonds over the past three days, the person said.

Market participants said on Tuesday that they expected the deal to attract strong demand, in part because investors are eager to increase their exposure to the LatAm market after so few deals from the sector have priced this year. The last corporate bond to come from the region was a US$1bn offering from Brazil's Braskem on February 8.

Felix Fischer of Lucror Analytics said he expects the new perps to price in line with Cemex's only outstanding perpetual bond, which, according to Refinitiv data, was quoted at 8.35% on Wednesday.

"We would view a yield in the 8.5% area for the new bonds as broadly fair value," Fischer said.

Cemex is marketing the hybrid green bond on the back of a updated green financing framework. Published on March 1, the new framework includes more aggressive decarbonization targets.

Fitch and S&P upgraded Cemex to BB+ from BB last year, based its decreased leverage and higher financial flexibility.

By Jo Bruni