Noble Group faces ratings downgrade to junk
Woes deepen at Hong Kong-based commodities trader after a year dealing with commodities rout, accounting questions and tight liquidity
Asia’s largest commodities trader, Noble Group, is grappling with fresh woes after another credit rating agency put the company on review for a potential downgrade to junk status.
Standard & Poor’s said on Tuesday it had put Noble’s BBB- rating, the lowest investment grade, on a negative watch owing to weak liquidity and poor earnings visibility.
“The liquidity position of Noble has deteriorated, in our view, because of a reduction in the Hong Kong-based commodity trader’s adjusted readily marketable inventory and committed undrawn credit facilities,” S&P said.
The negative watch, to be resolved in three months, follows similar action taken by Moody’s Investors Service last week, which put the Baa3 rating, also one notch above junk, on review.
Fitch Ratings said Noble’s liquidity was “just enough to support” its BBB- rating, but any further weaking in its liquidity position could result in negative rating actions.
We are committed to raising capital through various funding options
Earlier this month, Noble reported third-quarter profit that was down 84 per cent year on year to US$24.7 million, battered by a commodities rout and deficits in its mining and metals division.
