Fitch slashes Noble’s credit rating to junk over shifting debt structure

It’s moving towards short-term financing.

Noble Group saw its credit rating slashed by Fitch Ratings to junk status. Fitch brought down Noble’s BB+ to BBB-, noting that the commodity trader’s flagging debt maturity profile is no longer compatible with an investment grade rating.

According to a report by OCBC, Fitch has concerns about the shifting of Noble’s debt structure towards short-term financing to complement the company’s asset-light business model.

However, Fitch maintains a “stable outlook” for Noble, which reflects Noble’s continuous improvements in its balance sheet. It also mirrors Noble’s commitment to maintaining sufficient liquidity to cover capital needs.

Lastly, Fitch notes that a repayment of US$1.6b of debt in May could temporarily taper liquidity headroom. It could be partly offset, though, by a possible drawdown from Noble’s recently inked US$2b borrowing base facilities, and will boost the post-realisation of planned equity placement and non-core asset sales.