Fitch Top 10 Most Actively Traded LatAm Corporates: CEMEX Move to Investment Grade Depends on U.S.

martes 3 de febrero de 2015 12:02 GYT

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: CEMEX, S.A.B. de C.V. (Investment-Grade Path Runs Through the U.S.) here CHICAGO, February 03 (Fitch) CEMEX, S.A.B. de C.V.'s (CEMEX) long-stated goal to regain an investment grade rating depends on cement demand driven by a U.S. housing market recovery, according to Fitch Ratings. Fitch details its scenario analysis for Cemex in the latest report in its new series 'Top 10 Most Actively Traded LatAm Corporates'. One report in the series will be released each day through Feb. 13 per the schedule at the end of this release. 'CEMEX's ability to regain its investment-grade status within the next three to five years is highly dependent upon an increase in cement demand of around 8% per year in the U.S. and 5% in Mexico,' said Phillip Wrenn, Associate Director. Cement volume recovery in the U.S. is important to CEMEX due to the degree of operating leverage the company possesses in the region and its effect on EBITDA growth. CEMEX's U.S. EBITDA is expected to be around USD410 million in 2014, which is an improvement from the negative USD100 million generated in 2009. This figure, however, remains well short of the USD2.3 billion generated by the company's U.S. operations in 2006. U.S. cement volumes are expected to recover due to the positive housing market trend. Total housing starts are projected by Fitch to expand 14% to 1.145 million, as single-family starts should advance by about 18% and multifamily volumes grow by 7%. The company's ratings are constrained by its high leverage, despite the steps taken by CEMEX to improve its financial position. Challenges to deleveraging include rising working capital needs and higher taxes. Heavy capex could be an impediment to the company achieving its goal within its stated time frame. CEMEX's capex-to-depreciation ratio has been low during the past few years, at around 0.5x. A resilient stock price will be a key variable in CEMEX's ability to reduce debt levels. Fitch will release one report per day in its 'Top 10 Most Actively Traded LatAm Corporates' series as follows: Feb. 2: Oi Scenario Analysis - Asset Sales and Industry Consolidation are Key to Credit Profile Recovery Feb. 3: Cemex Scenario Analysis - Road to Investment Grade Runs through the U.S. Feb. 4: Ecopetrol Price and FX Sensitivity Analysis - Rating Linkage with Sovereign Could Weaken Feb. 5: America Movil Scenario Analysis - No Separation Anxiety Feb. 6: Vale Scenario Analysis - Ratings Rock Solid Despite Industry Softness Feb. 9: Pacific Rubiales Scenario Analysis - Preserving Liquidity Depletes Reserves Feb. 10: PDVSA - Something's Gotta Give Feb. 11: Cencosud Scenario Analysis - What Factors Could Stabililze the Company's 'BBB-' Rating Feb. 12: Construtora Norberto Odebrecht Scenario Analysis - Could CNO Lose its Investment Grade Rating due to Lava Jato Scandal? Feb. 13: Petrobras - A Political Labyrinth The full report, titled 'CEMEX, S.A.B. de C.V.,' is available on the Fitch web site at ''. Contact: Phillip Wrenn Associate Director +1-312-368-2075 Fitch Ratings, Inc. 70 W. Madison Street Chicago, IL 60602 Joe Bormann, CFA Deputy Regional Group Head Managing Director +1-312-368-3349 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: Additional information is available at ''. Applicable Criteria and Related Research: Oi, S.A. Scenario Analysis here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.