Good morning and welcome to the CEMEX Third Quarter 2021 Conference Call and Webcast. My name is Dan and I'll be your operator for today. [Operator Instructions] And now I will turn the conference over to Lucy Rodriguez, Executive Vice President of Investor Relations, Corporate Communications and Public Affairs. Please proceed.

Good morning. Thank you for joining us today on our third quarter 2021 conference call and webcast. I hope this call finds you and your families in good health. I'm joined today by; Fernando Gonzalez our CEO; and Maher Al-Haffar our CFO. As you are aware we hosted the second part of our Annual Analyst Day three weeks ago. And as a result, today's commentary will be more abbreviated and focused on the quarter. We encourage you to access the full recording and slides of our Analyst Day on cemex.com. As always, we will spend a few minutes reviewing the business and then we will be happy to take your questions. I will now hand it over to Fernando.

Thanks Lucy and good thanks to everyone. In the third quarter we had strong topline growth of 8% on a like-for-like basis reflecting continued demand for our products as well as the acceleration of our pricing efforts to compensate for input cost inflation. Pricing was the most important level in performance with all regions contributing to growth. Indeed, cement prices rose 6% year-over-year the biggest year-over-year pricing percentage gain in fourth quarter 2016. However, this achievement was not sufficient to protect us against supply chain issues, as well as sudden drive in fuels, electricity and transportation. As a result, consolidated EBITDA margin dropped 1.6 percentage points. As always, we moved decisively to address cost headwinds through pricing actions and you should expect that we will continue to do so in the future. Meanwhile, our cost discipline continued to pay off as we maintained record low levels of OpEx as a percentage of sales. Free cash flow after maintenance CapEx was approximately $370 million decreasing versus last year due to higher maintenance and working capital investment. But importantly year-to-date free cash flow after maintenance CapEx followed versus the prior year. We continue to make progress on deleveraging with our leverage ratio now at 2.74x a reduction of 0.11x on a sequential basis. Finally, I'm pleased to announce that in the next days, we will be refinancing $3.25 billion of bank debt with an improvement in terms and conditions more reflective of an investment-grade credit. The security undermined the bank loans, as well as the breadth of our senior debt has fallen away. And importantly, the bank debt under the new agreement will be aligned with our recently announced sustainability-linked financing framework. Haffar will elaborate on this during his remarks. Despite weather impact in several major markets, volumes were an important driver…

Thank you, Fernando. Despite heavy rains and hurricanes in the quarter, the US continued to enjoy strong demand across all products, with most of our markets sold out. Cement volumes grew double-digit in three of our four key states. The outlier was once again Texas, which experienced significant weather issues in the quarter. Demand continues to be driven primarily by the residential sector. In response to severe input cost inflation related to imports and energy, we announced a second round of pricing increases for the third quarter. The first time in 15 years, we have introduced a second round of pricing throughout our US footprint. The pricing announcement, which covered our cement and ready-mix businesses, resulted in prices increasing 2% sequentially. And while we are pleased by the new cadence of pricing increases, it is still not enough to compensate for today's rising cost in energy and the imports. We will continue to consider these costs in our 2022 pricing increases. We have already announced price increases for January, for Florida and Southern California, an area which represents approximately 35% of our cement volumes. We will soon be announcing pricing increases for April for the remainder of our markets and we intend to announce a subsequent pricing increase for the summer or early fall. During the quarter, we experienced inflationary headwinds, driven by a 34% increase in the year-over-year cost of imports and a 19% rise in energy costs. As a result, our EBITDA margin declined by 3.6 percentage points. As we look forward, we remain optimistic on the outlook for volumes in the US. We believe that while residential growth is slowing from the strong pace of the last 12 months, it will continue to add incremental volumes over the medium term. We also expect industrial and commercial demand…

Thank you, Lucy and good day to everyone. As Fernando mentioned at the beginning of the call our results year-to-date have been quite strong with free cash flow more than doubling from last year. This growth in free cash flow is driven mainly by strong operational results and lower financial expenses, partially offset by higher CapEx and investment in working capital. We've refinanced approximately 50% of our debt stack this year at a lower cost. That has translated into a reduction of 60 basis points in our cost of debt. This figure includes the refinancing of our bank facility in the next few days as Fernando mentioned. This in conjunction with debt reduction has translated into interest expense savings of $92 million year-to-date. We expect to reach savings of $120 million for the year. Investment in working capital is higher than last year, driven primarily by inventory buildup and related inflation, among other effects. In terms of days however, we are seeing a reduction of two days working capital to minus 14 days year-to-date, driven primarily by better collections efficiency. Net income for the quarter is $1.2 billion higher than last year, driven by better operating performance and lower financial expense. However for the quarter, it resulted in a loss of $376 million driven primarily by a close to $500 million non-cash impairment, mostly related to goodwill in our operations in Spain and the United Arab Emirates. Year-to-date net income is up $2.1 billion year-over-year, reflecting better operational results, sale of CO2 credits as well as lower impairment charges this year versus last. As Fernando said, we are pleased to announce that we have syndicated a new bank facility for $3.25 billion, which is replacing our previous $3.1 billion facility. This is of course subject to final documentation and customary…

Thank you Maher. As you are aware at CEMEX Day, we gave a preliminary estimate of a cost headwind of approximately $100 million due to supply chain, transportation and inflationary pressures. After closing third quarter and considering recent volatility and supply chain disruptions, we believe there could be downside risk to our initial estimates. As a result, we are lowering our 2021 EBITDA guidance to a range of $2.95 billion to $3 billion. This range considers a marginally higher adjustment from what was discussed at CEMEX Day. We expect that pricing increases going forward will offset this input cost inflation but it will occur with a live. Given the high capacity utilization in most of our markets, we are confident that we will be able to price through this cost decline. And we think this is already happening since in the third quarter, we saw the best percentage price growth in cement since 2016. Importantly we are not making changes to our expectations of sales growth. Our regional volume guidance, which is available in the appendix of the presentation, remains unchanged. We have adjusted our guidance for energy cost in the production of cement to 14% growth versus our prior 12% estimate. Due largely to supply chain disruptions, we are lowering our total CapEx guidance by $100 million. Finally for working capital, we are expecting an investment of approximately $200 million for the year. The economic outlook for our footprint is favorable. In ready-mix and clinker business, most of our markets are operating at sustainable mid-cycle levels, while others are entering an up cycle after years of decline. While we expect volume growth will be more muted due to more difficult prior year comps, we continue to expect growth driven by pandemic reopening and fiscal and monetary stimulus. Supply/demand dynamics across the portfolio are tight and should be supportive of price. With our production and logistics network, we are uniquely positioned to deliver on these growth opportunities. Energy will remain a headwind for the foreseeable future, but we believe our energy diversification strategy and pricing will provide counterbalance. We will remain vigilant on costs and there is more visibility on supply chain resolution. Our investment focus remains on our bolt-on investment portfolio and we believe there are ample opportunities for us over the next two years to three years. The return on these investments should continue to support EBITDA growth in 2022 and beyond. And finally, we will continue to advance on our climate action goals, not only because it creates value for stakeholders, but because it is the right thing to do for future generation. And now back to you Lucy.

Before we go into our Q&A session, I would like to remind you that any forward-looking statements we make today are based on our current knowledge of the markets in which we operate and could change in the future due to a variety of factors beyond our control. In addition, unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases refer to prices for our products. And now, we will be happy to take your questions.

In the interest of time and to give other people an opportunity to participate, we kindly ask that you limit yourself to only one question. [Operator Instructions] And the first question comes from Adrian Huerta from JP Morgan. Adrian, please go ahead.

Thank you, Lucy. Hi, Fernando and Maher. I want to talk about --

Hi.

Hi. I want to talk about this year's guidance and next year's expectations. So number one, based on the new EBITDA guidance that you provided, the implied 4Q EBITDA seems to be with a growth of around 10% to 18% year-on-year, which is much better than 3Q's growth of plus 2%. What will be different in the fourth quarter versus the third quarter? And what gives you confidence on this implied EBITDA for 4Q with energy costs and imports will likely not change much versus 3Q? That's number one. And then, number two is, there's very good momentum on prices. And so far cement prices are 4% in local currency year-over-year in the first nine months, stronger in the last quarter, aggregates and ready mix 1% and 2%. Should we expect a stronger pricing next year, given the comment that you have mentioned? Should we expect a couple of percentage points more? And if that will be more than enough to offset the higher energy cost pressure that we will see next year?

Thanks Adrian. Let me start with the first question about the fourth quarter EBITDA growth. I would like to refer mainly to two variables. The first one is the inertia of our adjusted pricing strategy and the second one is the low level of maintenance we are going to be having during the fourth quarter. Since last year and originated by the pandemic, our maintenance has been changing its timing because of initially some plants slowing down or even shifting down and now the coal plants almost running to full capacity. So we have some adjustments in maintenance, but we do expect a lower maintenance during the last quarter. Now, let me refer to the inertia of our adjusted pricing strategy, because it is impacting already, it will impact even more during the fourth quarter. And it will set expectations on pricing for next year. So I tried to briefly describe the process. We all know what happened. There were some signs of inflation there during the year, but nothing as clear and as high as we know nowadays, but we started feeling the impact of the input cost inflation and started reacting during the second quarter. Now, you can hardly react immediately to this phenomenon. We have seen it in the past and it takes some time to -- for us to react, to announce, to adjust and for customers to assess and for the whole market to move forward with a different pricing strategy. So when I say this is a process that it's going, it is going and it's going very well and there will be some additional inertia for the fourth quarter. Let me refer to the fact that our prices, if we measure them comparing point to point, comparing December 2020 to September 2021 prices have increased 15% in EMEA, 9% in Mexico and 7% in the US. So that will continue happening in the fourth quarter and we do believe we really consider that the same inertia with the additional pricing strategy of '22 will allow us to minimize the impact of inflation for next year. Why am I talking about an adjusted pricing strategy because that is what you have to do. And we have managed to increase depending on the market, the conditions, the users in the market. We have increased prices 2x to 5x during the year to adjust to these new levels of inflation. So I think we will be better prepared in our pricing strategy for next year because we can say that this year we energy acting in the second quarter and effectively already by the summer. But next year it will start from January 1. So the impact of our pricing strategy will be much larger than what it was this year.

Yes, I think that’s included. And well I was going to say just a follow-up on when you said that on the maintenance -- the lower level of maintenance can you quantify that a little bit on what would be 4Q versus what we saw in third-Q?

I don't have that in for handy. I don't know if market would lose the…

Yes. Yes Fernando I cannot comment on that. Adrian one thing I wanted to add which is on the maintenance topic is that, remember that third quarter last year we were in kind of virtual lockdown. I mean -- and maintenance was relatively low compared to third quarter of this year. So I think that when you're looking at the sequential third quarter to fourth quarter you have to consider that -- I mean we have increased scope of maintenance quite significantly in the third quarter. And going into the fourth quarter, I mean we have an estimate mid-teens to low 20 difference between third quarter and fourth quarter in terms of maintenance differential. So that in itself is a big item. The other thing I wanted to mention also at the on complementing what Fernando said on the supply chain side, again we need to take a look at what happened in the third quarter. We had a particular spike in imports and purchases in one of our biggest markets which is the US and we think that will be managed more better I would say or let's say without the surprise that we had in the second quarter you have the ramp-up of CPN and other imports coming from Mexico which should also help in that. So you have the pricing, you have the cost effect, you have the supply chain effects and then the maintenance effect. That's what gives us the comfort that we should have the sufficient sequential growth to get us to the full-year range that Fernando guided to.

Thank you, Fernando and Maher.

Thank you.

Thank you. And the next question comes from Francisco Chavez from BBVA. Chavez, please go ahead. Francisco Chávez: Hi, thanks for the call, Fernando, Maher and Lucy. My question is regarding the drop in EBITDA margins. Besides the increase in cement prices do you have any specific strategy to offset this margin erosion specifically cost savings plans or maybe can we expect the bolt-on investment to offset this margin erosion? Thank you.

Sure. Let me start with a few comments and perhaps after either Mahar or Lucy can complement. I think there is not a simple bullet to deal with the levels of inflation we've seen in the last few months. But I would like to refer to three issues. The more relevant one is our pricing strategy. That, of course, is the best response for higher levels of inflation. As I commented in the previous question to Adrian, we have already adjusted since we started every meeting during the second quarter adjusting our prices according to our inflation expectations for the rest of the year. And as I said, we have already managed to increase two to four times prices depending on market conditions and practices. And I think as of September when comparing point-to-point, our price increases have shown being extraordinary compared to previous years. And we do believe they will continue to be extraordinary in terms of higher increases to cope with higher inflation. That's the fifth comment. Then there are other issues related to cost reductions. I'm not going to make full disclosure on issue, but let me refer to two of them. With impact the year but higher impact, positive impact in next year is the increase in the use of alternative fuels and you know alternative fuels in our case using basically RDAF, is a fuel coming from weight with high content of biomass. Those fuels do not correlate to the price of oil or coal or petcoke or any other. So, when we see these high prices in petcoke and others, alternative fuels tend to be much more attractive. We continue increasing the level of alternative fuels. We are just finishing the last investment in our Rugby plant the UK. So, you can expect some…

Thank you.

And the next question comes from Nik Lippmann from Morgan Stanley. Nik, please go ahead.

Thank you very much. Thanks for the call and for taking my question. I was wondering just changing a little bit to South America and ask perhaps a similar questions. You had very positive language with regards to pricing in the Caribbean-Colombian market. When -- can you give some color on when you think that we will see that materialize we'll see pricing into 2022 some of the dynamics that you're seeing in those particular markets? Thanks a lot.

Well, thanks, Nik. I think the process itself and the strategy itself is very similar to the one that I have described. But each country and each market is different. And what we have seen clearly is that this adjusted pricing strategy has been taken by the market, for instance, in the case of the US and Mexico. In the case of stack some countries and because of basically, you know, how this is because of basically being sold out then this pricing strategy sticks and evolves very nicely. In the case of South America there might be some markets and countries where capacities not fully utilized and the strategies of trying to cope with the input cost inflation are not as effective as others. So in the case of South America there might be a couple of markets. One example is Panama. There is still excess -- not excess capacity but capacity is not fully utilized. So we might have some issues in that type of market in South America.

And maybe if I could just add one point that I think is important to just highlight for the quarter. In SCAC, a very important market is Jamaica, particularly in the Caribbean. And Jamaica was under a very strict lockdown because of the emergence of COVID again in third quarter that affected volumes tremendously as well as we had significant maintenance there. So, I think Jamaica is one of the higher-priced markets. So, I think when you look at pricing performance of SCAC for the quarter it is impacted by that from -- again from a mix effect. So, just to keep that in mind.

Got it. Thanks a lot.

Thanks, Nik.

And the next question comes from Carlos Peyrelongue from Bank of America. Carlos?

Thank you, Lucy. Thanks for taking my question. Question is also related to pricing. You mentioned that the new strategy will be to increase pricing at least twice a year. And I wanted to ask if this applies also to SCAC and EMEA, if they're going to also be following this strategy of at least two increases a year. And besides the increases, you mentioned in Florida, California and Mexico, have you announced any other price increase for next year or for the remainder of the year in the other regions?

Let me start with the first question and I’ll pass the other one to Maher and to Lucy, just to clarify Carlos. We do know - we have a general new strategy on pricing. Well, it's really not new. The basis of the strategy we always have which is at least recovering input cost inflation. The thing is that inflation has increased dramatically. So the adjustment is how to cope with these levels of inflation as fast as possible. But we are not -- we do not have a global type of pricing strategy. It is a global intent, but the specific pricing strategy has to be accommodated in each and every market and the conditions in the market. So just to clarify that, I did mention that this year, we have been increasing in some markets we have been increasing price twice a year. But in some other markets, we have increased sometimes already. So the pricing strategy of two times and perhaps three times a year is more related to developed markets like Europe and the US and the three times, four times per year is more related to bank cement in emerge. And that's because of the characteristics of each market and business. But I think regardless of the number of times, we adjust. I remember with very high inflation long time ago there were monthly price increases or weekly price increases. But I think what we -- what should be clear that what we are doing is to at least recuperate input cost inflation. And next year we will try to recuperate whatever inflation happens in 2022 and whatever we have lost in 2021. The other consideration that, I think I consider it relevant is -- and then remember that our reaction to a much higher inflation in our pricing strategy even start in January this year. We started second quarter -- at the end of second quarter, let's say, during the summer. And next year it has already started. The prices that we have announced are already considering much higher levels of inflation. And the frequency of those increments will be also different during next year. So that's what I have to say. I don't know, Maher, can you comment on the second part?

Yes. And Carlos, could you repeat the second piece? I mean because I feel that Fernando maybe covered it. What was the second part of your question?

The second part Maher was whether they have already announced price increases in other regions apart from Mexico, California and Florida that Fernando mentioned.

Yes, yes, of course. I mean we -- I mean again Europe is difficult to talk about. But in Europe, we've had announcements in July and they're announcements for later this year in Spain. You had obviously the beginning of the year and then you had in October also some pricing increases in Poland, you had announcing increases both in April and in September. In Colombia, you had two pricing increases in January and then in May, during the year. In the Philippines, although the market there is a little bit difficult, there was an announcement in August. So it is really throughout our portfolio that there has been, multiple pricing increases. And as Fernando said, I mean going into 2022, there's probably likely to be more timely pricing increases proactively than probably this year. And we believe the traction, I mean, I'd like to come back to a point that Fernando mentioned early on in his Q&A and that is the acceleration of pricing on a sequential basis. The point-to-point pricing in our market is really, really critical Carlos. I mean, having a 15% pricing increase in EMEA primarily as a consequence of the pricing action in Europe, point-to-point December to September, very important Mexico 9% point-to-point, U.S. 7%. And these are happening roughly from middle of the year into the third quarter. So we're likely to see better pricing acceleration into the fourth quarter and certainly into next year right. And as Fernando said, with several of the markets we're operating in being sold out, the dynamics for traction should be more favorable.

Understood. Thank you.

Thank you very much, Carlos.

And the next question comes from Barbara Halberstadt from JPMorgan Fixed income.

My question is on the cost increases being particularly in the U.S. and Europe how persistent do you think these pressures are? Also, how do you see these inflationary pressures in Mexico and SCAC, which seems to have been more contained this quarter? I think we've talked a little bit about the last point but maybe how persistent do you think these pressures are in the U.S. and Europe?

Well, I think what we can comment is that we are considering as our base case scenario that inflation will continue that shipping costs are not going to be declining or not in the very short-term the use the inflationary causes in oil, national gas, coal, pet coke will be maintained perhaps even going a little bit shorter. But all-in-all I think in our base case scenario, we are assuming that this inflation will be sustained. And that's the base case, we are considering again for our adjusted pricing strategy. So that is basically what we see on how persistent this inflation will be. We all have heard that this inflation is caused, because of the demand and as well as a supply shock. And it is temporary. And most probably that would be the case. But we are -- this is our base case scenario in inflation for the rest of the year and for 2022.

And if I can add Fernando, I think Barbara the other component here is a good portion as you can see, as you saw in the presentation was we purchased the purchase of cement and clinker or the imports of cement and clinker, primarily in the U.S. and to a lesser extent in the U.K. because we shutdown a plant there. And in the U.S. there was a spike in need for product, because we're sold out and the market grew at a fairly high rate. Now, as you know, we are ramping up production in a couple of our plants in Mexico for exports into the U.S. that is likely to help going into next year. And also, managing better the transportation, contracting transportation, I mean as Fernando said, we don't expect transportation to go down. But if you're contracting transportation on a very short-term basis, it's likely to be higher than if you were managing it on a longer-term basis. So, we do expect inflation to be persistent, but we also expect managing the cost going into 2022 in the US and I mean all of our markets, but particularly in the US where the source of input cost there, because the business was doing very well. I mean, not because of bad reasons, it's because of good reasons that that's happened frankly. Lucy, I think we can go to the next question.

Yes. Okay. Sorry, I seem to be having one of the virtual hazards from working from home. The next question comes from Vanessa Quiroga from Credit Suisse. And I’ll go on mute.

Thank you. Hi, Fernando, Haffar and Lucy. My question is regarding the early 2022 guidance that are provided of 10% growth in EBITDA. How comfortable do you see right now with this potential growth? And maybe just quickly, if you could break down the reduction in margin in EBITDA margin for Mexico, how much was it due to less favorable mix how much higher energy costs and how much was higher maintenance that would be expected? Thanks.

I will take the first part and I would like to have Al-Haffar to take the second one. So Vanessa, we have as you know we have reduced our guidance for this year to $250 billion to $200 billion. So that's already a lower base when we gave the guidance of 2022 10% growth of the 2021 base. So we feel still – let me tell you the positives, and the concerns we have on that guidance. So we feel positive in terms of our markets and volumes continue evolving in a very positive manner. Using as an example the US and Mexico, although we've seen adjustments to a lower numbers GDP growth in general terms one percentage point here and there. We have not seen that translated into a lower or a bigger impact in our activity in our sector in construction. So you know the story very well. In the case of the US, we do see housing still very positive multi-pay booming. A couple of pieces of info, I mean, inventory levels are getting into a level two, three months that's already – I consider that already at some sort of scarcity. It is too low. At the same time, they are very positive but also like still the cost of mortgage employment so we believe that the housing in the US will continue being very positive. Infrastructure even without the new infrastructure buildup, of course, we do expect to pass during the fourth quarter. But even without that infrastructure has been contributing in a moderate manner, but it's been contributing. And in the case of industrial and commercial, it's little by little but it can impact. That's the part of the economy that is coming back after the heavy impact of coming COVID-19 in the economy.…

And Vanessa on the margin, I mean, a couple of things were happening in Mexico. I mean, of course, it did drop by 80 basis points. The product mix was about 1.5 percentage points of that and that was primarily due to -- if you take a look at particularly in the quarter, cement volumes moderated versus very healthy growth in ready-mix volumes and in aggregates volumes. And so there's a little bit of - that's the product mix effect that is taking place. On the full-year basis, of course, I mean on a year-to-date basis cement volumes continue to outstrip the growth that we're seeing in ready-mix and to a lesser extent in the case of aggregates. The -- we also had higher wages and salaries in the quarter. And that's primarily because of maintenance, cost and inflation as well in terms of salaries and energy was of course a very important contributor. That was -- that had a negative impact of almost three percentage points because of the real important spike in pet coke prices almost 150% on a year-over-year basis. Now, of course, all of that is being offset by very good pricing actions, which was almost 4.5 percentage points offsetting some of these drops. So -- and then the other component also that was growing tremendously is urbanization solutions and urbanization solutions also have lower margins good return on capital but lower margins and that contributes a little bit to the product mix as well. So I hope that covers the question Vanessa that you had on that.

If I could just add one point on that. On the higher wages, Vanessa, a lot of that is related to the outsourcing law in Mexico that took place. So just to be clear, okay?

That’s it. Thank you very much.

Thanks Vanessa. The next question, I think we can answer fairly quickly, because it's we’ve done part of it already. But it’s from Francisco Suarez from Scotiabank.

How far Fernando, can you go to increase your fossil fuel substitution rate in the short-term to mitigate the rise in energy cost and in which region? It is my understanding that at very high rates of capacity utilization, you can't add more alternative fuels unless you add hydrogen.

Sure. Thanks for that question, Francisco. And you may know our substitution of primary fields with alternative fuels and in alternative fuels mainly RDF, meaning the fuel coming from households and industrial waste has been evolving to time. It was like 15 years ago when we started decisively to move forward with this type of fuels and we have managed to get to almost 30% substitution. And you know we have a target of almost doubling that amount by 2030. So we continue the process. I have already mentioned a couple of times this specific project that is going to be finished by next month and will contribute to the increasing alternative fuels of CO2. We continue with this investment everywhere. There are material differences on the solutions from this type of alternative fuels in different countries basically below emerging, but there are solutions. In Mexico, we are using about 25% of our fuels as alternative fuels. The US about 20% or slightly more percent. So what you can expect is that we will continue these efforts. Now the observation you are making on the high rate capacity utilization on alternative fuels, is that right? That is the case and that is why we have proactively already incorporated hydrogen equipment in all our cement plants in Europe. That is done. And the reason being we do not want to slow down our alternative fuel strategy to the lack of capacity. So we are using hydrogen injection. We are also using oxygen injection to being able to cope with both our strategy in alternative fuels which has an impact in our climate action plan as part of a road map to reduce more than 40% of CO2 by 2030. And also to be sure that we can cope with the market. Now with all solutions put in place, if needed we can always turn to additional inputs to go with our market positions, but so far we have not need to do that. We have managed properly to keep capacities in other plants with these two solutions you are mentioning in the question.

Great. Thank you very much, and unfortunately we only have time for one more question. Anne Milne from Bank of America fixed income. Please go ahead.

Thank you. Good morning Fernando, Maher, Lucy. Thank you for the call as well.

Good morning.

Interesting and challenging time. So I want to ask, I guess, Maher would be the best one to answer this question about the -- some of the news on the debt front that you have. So you've released the collateral that was backing the financing agreements. And for those of us who've followed you for a while that's been in place for a long time. So that's a big deal. I think you mentioned Maher that you've simplified the guarantees. So I was wondering if you could tell us what the simplified guarantees would be? And just to confirm is it still the same that when you reach investment grade those guarantees might fall away as well? And then I just want to see what on this new financing that you're negotiating with your new margins and with your sustainability framework, how much do you think will be initially outstanding because they believe the current amount under your bank facilities is less than the at $3.25 billion, which is what you're agreeing to right now. So if you have any information on that that would be helpful. Thank you very much.

Sure Anne. Thank you for your question. I mean, just for everybody to know under the previous -- the current facilities agreement we have about nine guarantors and we're simplifying it to four guarantors. Two of the new -- two of the guarantors are new. CEMEX operations to Medico and CEMEX Innovation Holdings. And for those of you who are interested in this -- in the details of the corporate structure you can get that on our investment -- on our Investor Relations website. There's a very thorough or chart that shows all of the guarantors there. And we're simplifying it. We're taking essentially Senex Espania and all of that chain that was involved with some expanding just because of the cumbersomeness of dealing with any amendments and all that. It's very costly to administer. So that's the simplification. We're going from nine to four and we're offering two new guarantors that are higher level essentially than CEMEX, is fine essentially. And in terms of the pricing, as we said it's going to be about a quarter of percentage point on average tighter than the current facility. With the added benefit also and is that the facility is going to be -- instead of being multi-currency it's going to be in 100% in dollars. And then we're going to swap half of the dollar amounts into euros. And the reason we're doing that, because that gives us the ability to benefit from the negative LIBOR that exists today. As you know, your LIBOR is negative by somewhere around 56 basis points 57 basis points. So that effectively brings the overall weighted average cost even more than that because of that ability to do, which we did not have under the previous agreement. In terms of the sustainability piece, I mean this is the first time that we do financing under our sustainability framework. As you know, the framework has three elements to it, CO2 emissions, clean power, into our cement operations and alternative fuels. And there's a two basis point up or down spread on the first metric and then there's 1.5 basis points each on the other two metric again up and down. And those metrics are very consistent with other high non-investment-grade or when that come to the market recently. I mean we're right there within that level. And I forget, is there anything that I did not cover into the in your question?

Just the amount that you will initially have out finding under the new facility that's all?

Yes, of course. So the old facility was $3.1 billion and we had $2 billion and right literally in the last month or so we did a small prepayment on that. So out of the box, next week when we close the transaction, we will have outstanding under the facility $1.5 billion under the term loan and we will have the full availability. We will not have any utilization under the committed revolving credit facility which will be for $1.75 billion. So it will be $1.5 billion outstanding under the term loan and that's it.

Okay, great. Thank you very much. Good luck with that and congratulation.

Thank you very much Anne, for your questions.

We appreciate you joining us today, for our third quarter webcast and conference call. If you have any additional questions, please feel free to reach out to Investor Relations and we look forward to seeing you again on our fourth quarter results. Many thanks.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.