Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>Cemex delivered a margin step-up, with pricing, structural savings and Mexico strength lifting EBITDA 23.8% YoY to $1.02 billion.</li>
<li>Credit metrics improved. Net leverage including perpetuals declined to 2.1x, EBITDA coverage rose to 7.5x, and FFO/debt reached 34.4%.</li>
<li>We remain Neutral on the issuer but maintain Buy on the 2036s, where the curve still offers the best risk-adjusted concession.</li>
</ul>


Cemex delivered a margin step-up, with pricing, structural savings and Mexico strength lifting EBITDA 23.8% YoY to $1.02 billion.
Credit metrics improved. Net leverage including perpetuals declined to 2.1x, EBITDA coverage rose to 7.5x, and FFO/debt reached 34.4%.
We remain Neutral on the issuer but maintain Buy on the 2036s, where the curve still offers the best risk-adjusted concession.


Cemex 2Q26: Pricing Power Drives a Margin Step-Up

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.</li>
<li>We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.</li>
<li>The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.</li>
</ul>


With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.
We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.
The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.


Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

<ul>
<li>
Selective IG exposure: Cemex remains Neutral at issuer level, but the new 2036s are the preferred bond as the cleanest 10Y curve entry point.</li>
<li>
Carry, not concession: The Buy is driven by 5.8% YTW, benchmark liquidity and curve access, not by a clear new issue discount.</li>
<li>
Valuation caps rerating: Restored BBB- quality supports the credit, but fair spreads, Mexico macro risk and U.S.-Mexico trade uncertainty limit issuer-level upside.</li>
</ul>



Selective IG exposure: Cemex remains Neutral at issuer level, but the new 2036s are the preferred bond as the cleanest 10Y curve entry point.

Carry, not concession: The Buy is driven by 5.8% YTW, benchmark liquidity and curve access, not by a clear new issue discount.

Valuation caps rerating: Restored BBB- quality supports the credit, but fair spreads, Mexico macro risk and U.S.-Mexico trade uncertainty limit issuer-level upside.


Cemex Prices US$1.5bn 5.750% 2036 Senior Unsecured Notes

<ul>
<li>
Key Outcome: Cemex’s Mexico recovery, pricing discipline, and Project Cutting Edge savings support margin expansion, reinforcing a constructive credit trajectory despite a Neutral stance.</li>
<li>
Risk/Volatility: U.S. residential weakness, trade uncertainty, energy inflation, and Mexico-specific risks could pressure volumes or spreads in a broader EM risk-off move.</li>
<li>
Valuation Driver: Bonds already trade tight to averages, making curve selection critical, with 2029s defensive and 2031s offering better risk-adjusted carry.</li>
</ul>



Key Outcome: Cemex’s Mexico recovery, pricing discipline, and Project Cutting Edge savings support margin expansion, reinforcing a constructive credit trajectory despite a Neutral stance.

Risk/Volatility: U.S. residential weakness, trade uncertainty, energy inflation, and Mexico-specific risks could pressure volumes or spreads in a broader EM risk-off move.

Valuation Driver: Bonds already trade tight to averages, making curve selection critical, with 2029s defensive and 2031s offering better risk-adjusted carry.


Cemex 1Q26: Mexico Recovery and Cost Savings Drive EBITDA Beat

<ul>
<li>
Resilient Financials: 4Q25 revenue rose 10.6% and EBITDA 15.7%, driving net leverage down to 2.2x, though valuation caps upside as bonds trade near LTM tights.</li>
<li>
Shareholder Priority: Management prioritizes dividends and buybacks over accelerated deleveraging, using bank funding for maturities, which limits near-term balance sheet repair and spread compression.</li>
<li>
Defensive Positioning: We maintain a Neutral rating, favoring the 2029 notes for protection, as longer-duration bonds offer insufficient compensation for U.S.-Mexico trade risks and volatility.</li>
</ul>



Resilient Financials: 4Q25 revenue rose 10.6% and EBITDA 15.7%, driving net leverage down to 2.2x, though valuation caps upside as bonds trade near LTM tights.

Shareholder Priority: Management prioritizes dividends and buybacks over accelerated deleveraging, using bank funding for maturities, which limits near-term balance sheet repair and spread compression.

Defensive Positioning: We maintain a Neutral rating, favoring the 2029 notes for protection, as longer-duration bonds offer insufficient compensation for U.S.-Mexico trade risks and volatility.


Cemex 4Q25: Entering 2026 from a Stronger Position

Mexico

Cemex SAB de CV is a building products company. The Company produces, distributes, and markets cement, ready-mix concrete, aggregates, and related building materials. Cemex operates throughout the Americas, Europe, Africa, the Middle East, and Asia.

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Cemex SAB de CV (CEMEXCPO MM)

Cemex 2Q26: Pricing Power Drives a Margin Step-Up

Cemex’s pricing and savings lifted margins and cash flow, supporting deleveraging; Neutral issuer, but Buy the 2036s where value remains.

Leandro Gubler

Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

With the MSCI $ACWI approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here and believe caution is...

Vermilion Research

Cemex Prices US$1.5bn 5.750% 2036 Senior Unsecured Notes

Cemex’s new 2036s offer the cleanest 10Y curve entry, with Buy driven by 5.8% YTW, benchmark liquidity and carry, while issuer upside remains...

Leandro Gubler

Cemex 1Q26: Mexico Recovery and Cost Savings Drive EBITDA Beat

Cemex’s credit story is improving, but spreads already price much of the upgrade path, making bond selection the key call.

Leandro Gubler

Cemex 4Q25: Entering 2026 from a Stronger Position

Cemex posts strong 4Q25 results, but we hold Neutral as tight spreads and shareholder-focused capital allocation limit upside, favoring defensive...

Leandro Gubler

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