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PRESENTATION TO EXTERNAL REVIEW PANEL ON DC ISSUE 2009/100901

PRESENTATION TO EXTERNAL REVIEW PANEL ON DC ISSUE 2009/100901. In Support of “No” Position Herbert S. Washer Geoffrey B. Goldman.

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PRESENTATION TO EXTERNAL REVIEW PANEL ON DC ISSUE 2009/100901

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  1. PRESENTATION TOEXTERNAL REVIEW PANELON DC ISSUE 2009/100901 In Support of “No” Position Herbert S. WasherGeoffrey B. Goldman This slide presentation was prepared for purposes of the oral argument before the External Review Panel. It is not a complete presentation of the “No” Position on the Reviewable Question. For a more complete presentation of the “No” Position, please refer to the Brief and Appendix thereto.

  2. Has A Restructuring Credit Event Occurred With Respect To CEMEX? • Determinations Committee Vote: 9 “No” and 6 “Yes” • Failure of proof on whether the August Refinancing Agreement was a Restructuring rather than a refinancing • Failure of proof on whether the August Refinancing Agreement directly or indirectly resulted from a deterioration of creditworthiness or financial condition of CEMEX, S.A.B. de C.V., the reference entity

  3. CEMEX Consistently Refers To A Refinancing Agreement • Advocates agree § 4.7(a) requires modification of obligations rather than refinancing • September 22, 2009 Equity Prospectus uses “refinancing” to describe Refinancing Agreement 28 times; “restructuring” is never used “Having successfully completed our refinancing process, implemented our extensive cost-reduction measures and performed certain divestitures, we feel confident that we will emerge from the global economic crisis substantially stronger, leaner and better-positioned to take advantage of the expected business cycle upturn in our core markets.” (Prospectus S-9.) “…on August 14, 2009, CEMEX’s [sic] and its creditors completed a comprehensive refinancing over approximately US$14,961 in syndicated and bilateral bank and private placement obligations….” (Prospectus F-22.) • Same is true in CEMEX 2009 Third Quarter Results • Same is true in August 14, 2009 announcement

  4. Excerpts From September 22, 2009 Equity Prospectus “The share security [granted to creditors in the August Refinancing Agreement] may be enforced if: (i) an Event of Default has occurred and is continuing under the financing agreement; (ii) the debt has been accelerated under the financing agreement (which requires a 66.67% majority decision of the participating creditors); and (iii) 75% by exposure of creditors participating in the financing agreement and those that have provided funds to refinance the debt of participating creditors and 66.67% by exposure of participating creditors, determine to enforce.” (Prospectus S-85.) Referring to the private placement obligations included in the Refinancing Agreement, CEMEX wrote: “The new private placement debt bears interest at a rate of 8.91% (except for the debt denominated in Yen, which bears a corresponding rate of 6.625%). The interest rate on the new private placement debt is subject to the same adjustments as described above, on the same terms.” (Prospectus S-86.)

  5. Transcript of August 17, 2009 Investor Call • “Your first question comes from Jacob Stanfield from JPMorgan. Please proceed. • Q. Hi, good morning. Thanks for the call. I – in terms of the refinancing, was any of your debt repaid with the new facility or were – was there any flow of funds or were all the facilities just extended under these new terms? • A (Hector Medina, Executive Vice President of Finance and Legal). No the – 100% of the facilities that included in the – this agreement are being refinanced. We think it’s a show of the confidence of the – of these financial institutions and private placement note holders. So it is all the debt that is being refinanced. • Q. Right, but it was there any flow of funds? I mean was the new facility created and… • A. No. • Q. The old agreements repaid? • A. No. That is – 100% of the old debt was extended in March.It’s being refinanced under this agreement.”

  6. Market Finds Restructuring Provisions Confusing and Vague “Identifying restructurings is an industry-wide problem.”(Lehman Brothers Fixed Income Quantitative Credit Research: The Restructuring Clause in Credit Default Swap Contracts, 5 (April 2003).) “The current definition of Restructuring is clearly not workable if it is susceptible to the misinterpretation, as it apparently is in the minds of certain market participants, that there has been a Credit Event with respect to Xerox.”(Letter from ISDA and London Investment Banking Association to the Basel Committee on Banking Supervision, October 2, 2002, app. 1, at 5.) “[W]e believe that the Restructuring credit event has become the greatest source of uncertainty and potential for dispute in what is a crucially important risk distribution channel for banks.”(Letter from ISDA and London Investment Banking Association to the Basel Committee on Banking Supervision, October 2, 2002, app. 3, at 9.) The Xerox “experience highlights the problem of determining whether a refinancing is a modification of an existing loan or roll-over into a new loan. The borrower may be indifferent and may easily be persuaded by the banks to classify the refinancing as a restructuring that can trigger default swaps held by the banks.”(Lehman Brothers Fixed Income Quantitative Credit Research: The Restructuring Clause in Credit Default Swap Contracts, 6 (April 2003).)

  7. Market Answer To Ambiguity Has Been To Require Hard Credit Event “‘The result [with respect to Fannie/Freddie P/O Deliverables issue] reflects the optimal outcome for the legal integrity of the contract and is the right outcome for the reasonable economic expectations of market participants,’ said Robert Pickel, Executive Director and Chief Executive Officer, ISDA.”(ISDA News Release (September 16, 2008).) “ISDA should act to prevent the Restructuring-as-workout model from being expanded to accommodate a broader concept of Restructuring – one that would apply to non-distressed exchanges in which the restructured obligation is not a diminished obligation, the obligation holders suffer no corresponding economic loss and the Restructuring is accompanied or preceded by a credit impairment but not by actual, imminent payment default.”(Letter from ISDA and London Investment Banking Association to the Basel Committee on Banking Supervision, October 2, 2002, app. 2, at 8.) “In the restructuring, the banks agree to extend the maturity of the debt or otherwise modify its terms to prevent forcing the company to seek protection in bankruptcy.”(Lehman Brothers Fixed Income Quantitative Credit Research: The Restructuring Clause in Credit Default Swap Contracts, 2 (April 2003).) • Under Basel 2, credit events specified by contracting parties must cover:“…restructuring of the underlying obligation involving forgiveness or postponement of principal, interest or fees that results in a credit loss event (i.e. charge-off, specific provision or other similar debit to the profit and loss account).”  (Basel Committee on Banking Supervision, Quantitative Impact Study 3 Technical Guidance at 32-33 (October 2002).)

  8. CEMEX INITIATIVES 2008-2009 Company Condition Improving • Cut capex from $2.2B in 2008 to $650M in 2009 • Sold Australian operations for ~$1.7B • Reduced operating costs, generating $900M in savings • 13% appreciation of Peso • Raised capital through Certificacos Bursatiles de Corto Plazo • Securitized MXN $2.2B of accounts receivables • Negotiating compensation from Venezuela

  9. 2008 - Unconsolidated 2008 - Unconsolidated CEMEX, S.A.B. de C.V. (MEXICO) CDS Reference Entity Debt: $5.6bn9.625% 2009 Sr Notes: $60mn*Certificados Bursatiles: $2bn**Syndicated Bank: $2.7bn***Joint Bi-Lateral Bank: $785mn Sales: $3.7bnEBITDA: $1.4bnDebt: $0 CEMEX Corporation(USA) CEMEX Inc.(USA) CEMEX Finance SPV (VARIOUS) 100% *Bursatiles guaranteed by Nafinsa (50%) – ST Paper Only**Syndicated guaranteed by Mexico & Empresas Tolteca***Bi-Lateral guaranteed by Mexico & Concretos 2008 - Unconsolidated 100% 100% CEMEX, S.A. de C.V. (MEXICO) Primary Asset for Holdco Sales: N/AEBITDA: $15mm Empresas Tolteca de Mexico(MEXICO) CEMEX Concretos(MEXICO) 100% 2008 - Unconsolidated Sales: $500mmEBITDA: $100mm New Sunward Holdings B.V. (NETHERLANDS) 2008 - Unconsolidated Perpetuals Debt: $4.4bnBank Revolver: $350mmBank (Perpetual Refi): $1.05 bnPerpetuals: $3bn 100% Guaranteed by SAB, Mexico & NS 2008 - Unconsolidated Sales: $18bnEBITDA: $2.9bnDebt: $11.7bn CEMEX Espana, S.A. (SPAIN) 100% 100% Rinker Materials LLC(AUSTRALIA) CEMEX Australia(AUSTRALIA) Rinker Group Ltd.(AUSTRALIA) 100% 2008 - Unconsolidated *Syndicated Bank: $7.3bn**Joint Bi-Lat Bank: $1.5bn CEMEX International Opcos(VARIOUS) *Guaranteed by Cemex Espana**Guaranteed by Cemex Inc. and Cemex Australia*Bank Covenant: Subsidiary Debt Limited to <15% of Total Assets ($1.5bn Joint Bi-Lateral is included in the 15% Basket)Total Basket Available: $1.4bn or 6% of Total Assets 100% 100% 100% 2008 - Unconsolidated Debt: $600mm$400mm Pvt + $200mm Bi-Lateral * No guarantee from Cemex Espana 100% 100% 2008 - Unconsolidated CEMEX Finance Europe BV(NETHERLANDS) E900mm 4.75% 2014 Sr NotesGuaranteed by Cemex Espana 2008 - Unconsolidated 2008 - Unconsolidated Debt: $150mm (7.7% 2025 Notes $850mm Private Placement NotesGuaranteed by Cemex Espanda Guaranteed by Cemex Corp & Cemex Inc. 2008 - Unconsolidated Sales: $6.7bnEBITDA: $694mm Numbers Are Rounded Estimates

  10. 2008 - Unconsolidated 2008 - Unconsolidated CEMEX, S.A.B. de C.V. (MEXICO) CDS Reference Entity Debt: $5.6bn9.625% 2009 Sr Notes: $60mn*Certificados Bursatiles: $2bn**Syndicated Bank: $2.7bn***Joint Bi-Lateral Bank: $785mn Sales: $3.7bnEBITDA: $1.4bnDebt: $0 100% *Bursatiles guaranteed by Nafinsa (50%) – ST Paper Only**Syndicated guaranteed by Mexico & Empresas Tolteca***Bi-Lateral guaranteed by Mexico & Concretos 100% 100% CEMEX, S.A. de C.V. (MEXICO) Primary Asset for Holdco Empresas Tolteca de Mexico(MEXICO) CEMEX Concretos(MEXICO) 100% New Sunward Holdings B.V. (NETHERLANDS) 2008 - Unconsolidated Perpetuals Debt: $4.4bnBank Revolver: $350mmBank (Perpetual Refi): $1.05 bnPerpetuals: $3bn Guaranteed by SAB, Mexico & NS Numbers Are Rounded Estimates

  11. Liz Claiborne Set Market Expectations “‘Certainly, if [the Liz Claiborne amendment] is a trigger, thenthere may be a slew of further CDS triggers as many firms are doing a similar thing with their facilities….’ the analysts note.”(Structured Credit Investor, available online at https://www.structuredcreditinvestor.com/default.asp?page=1100&subtype=notloggedon&Status=8&SID=18874&ISS=22234.) Claiborne refinanced because its situation was unsustainable: “The choices we made weren’t elective [referring to layoffs, distribution center closings, other cost cutting measures as well as refinancing]. Not only did we reach a point where our earnings were unsustainable, we lost our focus and commitment to these principles.”(Liz Claiborne 2008 Annual Report, at ii)

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