Asian commodities trader Noble Group’s credit-rating has been reduced to junk by Standard & Poor’s and placed on watch for further cuts.
The ratings agency has lowered Noble Group’s local and foreign currency ratings to BB+ from BBB-. The downgrade by S&P follows a similar move by Moody’s Investors Service in the final week of December.
The cut came even after Noble Group agreed to sell agricultural interests to China’s Cofco Corporation for at least $750 million to bolster its finances and reduce debt.
Noble Group lost almost two-thirds of its value in 2015.
S&P said in a statement: “The liquidity position of Hong Kong-based commodity trader Noble is below our expectation for a strong liquidity despite the sale of its agricultural unit. The outlook for the company’s capital raising could be complicated by depressed commodity markets, in our view.
“The ratings remain on CreditWatch negative, reflecting our view that Noble’s liquidity outlook remains uncertain.”
Standard & Poor’s credit analyst Cindy Huang: “We downgraded Noble because the company’s liquidity is below what we expect for a strong liquidity position, despite the sale of its agricultural unit,”
“In our view, the company’s credit standing in the capital markets and with lenders has weakened, reflected in its depressed securities prices.”