not vested
Noble Group Downgraded By Fitch Yet AgainBy Daniel Shane
Beleaguered commodities trader Noble Group (CGP.SG), whose shares plunged 30% earlier this week, was dealt a fresh body blow as Fitch Ratings cut its debt rating for the second time in quick succession.
Fitch downgraded its credit score on Noble to B- from BB-, or by three levels. That reflects concerns at the ratings agency about Noble’s ability to address debts of USD2 billion to USD2.1 billion set to mature over the next 12 months.
Fitch had only downgraded Noble just over a week ago. Earlier this week S&P Global Ratings similarly downgraded the Hong Kong-based company, prompting investors to kick this stock to the curb.
Here’s more from Fitch:
The continuous negative news about the company and resultant weak sentiment is likely to make refinancing negotiations more difficult than we expected when we last downgraded the company on 16 May 2017, despite the strength of Noble’s balance sheet, with a high working capital/total debt ratio, low portion of secured debt and significant amount of assets available to pledge.
Most immediately, the company has $2bn of secured borrowing base facilities, of which approximately $600m was drawn down as of Q1 2017, which matures in June 2017.
Fitch believes lender banks may be inclined to roll a large part of this facility over, given the company’s high level of liquid working capital available to be pledged, but on less favorable terms.
Noble has been rocked these last couple of years by a broad downturn in commodity prices, as well as allegations of accounting voodoo by short-sellers. The Economist magazine has an excellent write-up this week that chronicles Noble’s misery in detail.
Separately, Noble said on Wednesday that talks with potential investors were still ongoing, which would help the firm in debt refinancing negotiations.
It was reported earlier in the week that Chinese state-owned business Sinochem is no longer interested in making an investment into Noble, citing concerns over the state of the company’s finances. Meanwhile,
Morgan Stanley has declared that it owns a stake of 8% in Noble.
The shares were up 2.4% in Singapore trading Friday morning. Noble’s stock has hemorrhaged three quarters of its value since New Year.
Source: Barron's Asia
http://www.barrons.com/articles/noble-g ... 1495767888
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