UPDATE 1-Cemex shares jump on debt refinancing news

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MEXICO CITY, Dec 23 (Reuters) - Shares of Mexican cement maker Cemex surged on Tuesday, a day after the company refinanced about $3.7 billion in debt, reassuring investors it would not default.

Cemex (CMXCPO.MX: Quote, Profile, Research), the world's No. 3 cement maker, rose 8.8 percent to 12.45 pesos, while its New York-traded stock (CX.N: Quote, Profile, Research) jumped 7.8 percent to $9.30.

The company said late Monday its banks agreed to refinance nearly $2.2 billion in debt maturing in 2009 and 2010. Monterrey-based Cemex, which operates in more than 50 countries, said creditors also agreed to extend almost one-half of its $3 billion syndicated loan facility due in December 2009.

Investors have worried that the company might default amid the global financial crisis, tight credit conditions and lower cash flow, as the U.S. housing crisis hits business in Cemex's top market.

Cemex has net debt of $16.4 billion and struggled earlier this month to lengthen maturities on $418 million in commercial paper, which was taken as a bad sign by the market.

But the refinancing has lifted investor gloom, and Credit Suisse upgraded Cemex to "neutral" from "underperform" Tuesday, citing the debt renegotiations.

"We are upgrading Cemex to neutral given that the debt rollover is no longer a concern and that the re-pricing was achieved at a favorable rate, considering the current scarce liquidity in credit markets," the bank said in a report.

Cemex said it is still negotiating maturity extensions for up to almost $3 billion in debt due by the end of next year, but is also looking to asset sales to pay off debt. (Reporting by Cyntia Barrera Diaz in Mexico City and Robin Emmott in Monterrey; editing by Jeffrey Benkoe)