CEMEX Issues Sustainability-Linked Bonds

CEMEX issued MX$5.5 billion (US$322.962 million)in long-term sustainability-linked bonds, further solidifying its commitment to sustainable financing. Acting as a joint intermediary, HSBC México facilitated the bond placement. The newly issued bonds consist of two tranches: CEMEX 23L (Re) with a variable rate of MX$2 billion and CEMEX 23-2L (Re) with a fixed rate of MX$3.5 billion. These bonds are intricately linked to sustainability goals, demonstrating CEMEX's dedication to environmental responsibility and carbon dioxide (CO2) emissions reduction.

Juan Carlos Pérez Rocha, Deputy Director General of Corporate Banking, Companies, and Government, HSBC Mexico, emphasized the bank's commitment to supporting companies in achieving their environmental objectives through the facilitation of sustainable bond placements.

Proceeds from the bond issuance will be channeled toward financing specific projects aimed at sustainability and environmental protection, aligning with CEMEX's broader corporate sustainability agenda. The settlement of this transaction is slated for Feb. 20, 2024, subject to customary closing conditions.

This issuance follows a similar endeavor by CEMEX last October, marking the company's reentry into the Mexican Stock Exchange after a 15-year hiatus. Since then, CEMEX has successfully raised a total of MX$11.5 billion through such initiatives, signaling its proactive approach to financial management. 

Mexico, alongside other emerging markets, is capitalizing on the favorable global financial environment to bolster its debt issuance activities. Analysts from the Institute of International Finance (IIF) and Oxford Economics highlight Mexico's strategic positioning amid evolving financial dynamics.

Driven by a decline in long-term US yields and positive performance in local currency debt, Mexico's government initiated new debt placements totaling US$9.5 billion in the first 18 days of the year, reports El Economista. As Mexico continues to witness a decline in interest rates, foreign investors are increasingly drawn to its debt securities.

With substantial financing requirements and robust access to capital markets, Mexico is poised to lead debt issuance activities this year, leveraging the conducive global financial landscape to advance its economic agenda while addressing sustainability goals.

Despite the challenge of high-interest rates, the debt market thrived in 2023 due to the continuous financing needs of companies and public entities. Refinancing requirements surpassed the cost of higher rates, and positive country outlooks driven by trends like supply chain relocation and nearshoring further contributed to the market's vibrancy, reports AXIS Negocios.

Earlier this year, the Mexican Stock Exchange (BMV) announced that it achieved decade-high results in 2023 despite challenges such as elevated interest rates and a scarcity of investments in the capital area. The success of the BMV is reflected in the confidence of both issuers and investors, with Grupo BMV reporting a total issuance of MX$572 billion (US$33.81 billion).