Fitch still believes in Noble, but there’s a catch

Unsecured funding access is crucial.

Noble Group is still investment grade, at least for Fitch Ratings. Fitch affirmed Noble’s ratings on Thursday, primarily on back of the group’s improved balance sheet and sufficient liquidity position.

Fitch provided one caveat, however: The ratings agency said that Noble’s investment grade rating hinges on the company’s ability to access unsecured funding, which might prove difficult after the group was cut to junk status by Standard and Poor’s and Moody’s.

“We believe that access to unsecured committed banking facilities is a key trait of an investment grade-rated trading company. Any signs of deterioration in the company's ability to access unsecured bank funding could result in negative ratings action,” Fitch said.

Despite the recent spate of bad news against Noble, Fitch said that the sale of its 49% Agri stake will improve its financial profile and increase its ratio of working capital.

Fitch also said that Noble’s recent share price plunge will not materially affect its ability to pay its debts.

“We do not consider Noble's current inability to access capital markets to have significant impact on the company's credit profile as its near-term debt maturity is small (USD360m of notes due in 1H16). This can be comfortably covered by Noble's existing liquidity, including unrestricted cash and cash equivalents and undrawn committed bank facilities,” Fitch said.