Mexico's Cemex Shares Gain On Debt Refinancing Optimism

Mexico's Cemex Shares Gain On Debt Refinancing Optimism

MEXICO CITY (Dow Jones)--Shares of Mexican cement company Cemex SAB (CX) rose Wednesday on investor optimism the company will be successful in its debt refinancing talks with banks.

Cemex CPO shares trading on the Mexican stock market were up 3.8% to 9.02 pesos ($0.63) around 1:20 p.m. EDT.

Carlos Hermosillo, an equities analyst at the Vector brokerage, said speculation about the company's ongoing debt talks, and optimism that the U.S. financial sector could be over the worst of the crisis, were helping the share price.

Cemex's shares have been among the most volatile on the local market this year as the company grapples with its heavy debt load and falling demand in its main markets.

Earlier this month, Cemex canceled a planned $500 million bond issue because of high yield demands by investors, and instead began talks with banks to refinance $14.5 billion in debt.

The shares fell sharply when Cemex balked at the bond deal, recovered, and fell again after the company canceled its usual mid-quarter earnings guidance, citing the debt refinancing talks.

Optimism that the refinancing will progress was fueled last week when Bank of Mexico Gov. Guillermo Ortiz said the central bank is planning to use a $30 billion currency swap line with the U.S. Federal Reserve to help the private sector refinance debt.

"Cemex's complicated foreign-currency denominated debt refinancing activities could end shortly, as soon as Banco de Mexico activates the $30 billion swap line with the U.S. Fed to help Mexican firms with refinancing problems in U.S. dollars," UBS Pactual said in a report Wednesday.

A Cemex spokesman said the company had no comment on the matter.

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