MEXICO CITY, April 1 Shares in Mexico's Cemex, struggling with debt payments in the global crisis, rose on Wednesday after the central bank said it would tap a $30 billion swap facility with the U.S. Federal Reserve to help local companies, analysts said.
Cemex (CX.N) (CMXCPO.MX) rose 4.26 percent to 9.30 pesos in Mexico City, above the Mexican IPC benchmark index's .MXX 1.29 percent rise. Cemex climbed 6.24 percent to $6.64 in New York, also helped by hopes the company could push ahead with its asset sale plan, according to analysts.
"You can see clearly that Cemex is outperforming today on the confidence people have that this swap line will be used for corporates at some point - through banks, not directly through the government," said Raul Morales, head of equities at Bulltick Casa de Bolsa brokerage in Mexico City.
Central Bank Gov. Guillermo Ortiz said on Wednesday dollars from the swaps with the U.S. Federal Reserve could be handed out to Mexican companies via the banking system after the first auction expected in the next few days.
"Cemex may not need any funds because we are hopeful it will refinance with its banks, but it is a positive factor helping the stock," Patricio Rivera-Torres, an analyst at Ixe brokerage.
Cemex, the largest supplier of cement in the United States, is struggling with $14.5 billion of debt, a third of which is due this year, and some investors have speculated for weeks that the Mexican government could bail the company out.
The U.S. Federal Reserve established the dollar swap facility in October to ease U.S. dollar funding shortages in Mexico as Mexico's central bank spent reserves to defend the weakening peso.
As demand for building materials like cement dries up in Mexico, the United States and in Europe, analysts' are forecasting that Cemex will have very little cash left by the end of June and could miss payments if it fails to convince creditors to restructure its debt.
Hit by the global economic crisis, Cemex, the world's No. 3 cement maker, went to its banks late last year to refinance maturing debt and is again in talks with banks to renegotiate syndicated and bilateral obligations.
Cemex is struggling with its heavy debt load following its 2007 acquisition of Australia's Rinker, one of the biggest takeovers by an emerging market company.
Cemex made the purchase just as the U.S. housing crisis struck, and the ensuing credit crisis and falling sales have made it difficult to pay back its short-term debt. (Reporting by Michael O'Boyle and Robin Emmott; editing by Carol Bishopric)