Fitch Rates CEMEX Espana's Proposed Euro 500MM Notes 'BBB'; Watch Negative.

MONTERREY, Mexico & NEW YORK -- Fitch has assigned a rating of 'BBB' to EUR500 million of notes due 2014 to be issued by CEMEX FINANCE EUROPE B.V. (the issuer), and placed them on Rating Watch Negative. The notes are guaranteed by CEMEX Espana S.A. (CEMEX Espana) (the guarantor).

The following ratings remain on Rating Watch Negative by Fitch, where they were originally placed on Oct. 27, 2006:

CEMEX Espana

--Issuer Default Rating (IDR) at 'BBB';

--Senior unsecured 'BBB'.

CEMEX S.A.B. de C.V.

--Foreign currency Issuer Default Rating (IDR) 'BBB';

--Local currency Issuer Default Rating (IDR) 'BBB';

--Senior unsecured 'BBB';

--National long-term 'AA+(mex)'.

The issuer, a wholly-owned subsidiary of CEMEX Espana, is a private company with limited liability incorporated in the Netherlands. CEMEX Espana is controlled by CEMEX S.A.B. de C.V. (CEMEX). Proceeds from the notes will be used primarily to repay debt of CEMEX Espana and its subsidiaries and for general corporate purposes.

The rating is based on the credit quality of CEMEX Espana and its subsidiaries. On Oct. 27, 2006, Fitch placed CEMEX's and CEMEX Espana's ratings on Rating Watch Negative following the announcement that CEMEX intended to make a tender offer to acquire all of the outstanding shares of Australia-based Rinker Group Limited for US$12.8 billion in cash and debt assumption.

At December 31, 2006, CEMEX owned 99.7% of CEMEX Espana's equity shares. CEMEX Espana is an operating company incorporated in Spain that also serves as the holding company for most of CEMEX's non-Mexican operations. For the twelve months ended Sept. 30, 2006, CEMEX Espana had net revenues and EBITDA of EUR11.2 billion and EUR2.1 billion respectively. In recent months, weak residential demand, partially offset by public sector construction, has driven volume declines in cement and ready-mix in the U.S. In Spain, strong ready-mix and cement demand persists on the back of robust residential construction and infrastructure spending. The rest of Europe, South, Central America and the Caribbean, Asia, Africa and the Middle East have also reported strong performance. Favorable demand conditions continue to support price increases. Productivity gains are also offsetting a portion of incremental energy costs.

The combination of EBITDA growth and net debt reduction has strengthened CEMEX Espana's credit protection measures in recent months. At Sept. 30, 2006, CEMEX Espana reached a ratio of net debt to last 12 months (LTM) EBITDA (adjusted for royalties and management fees paid to CEMEX and the accounting treatment for CO2 emissions) of 1.1 times (x) and an interest coverage ratio of 7.3x.

CEMEX is the third-largest cement producer in the world based on production capacity of approximately 97 million metric tons in more than 50 countries. During 2006, revenues and EBITDA reached US$18.2 billion and US$4.1 billion, respectively, and the largest contributors to cash flow (EBITDA) were as follows: Mexico, 34%; the United States, 29%; and Spain, 13%.

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