COMMODITY trader Noble Group said on Thursday that its change in investment grade status is not expected to have a material impact on its operations.
The group made this statement after credit ratings agency Standard & Poor's (S&P) downgraded Noble to junk status on Thursday, lowering the company's local and foreign currency ratings to BB+ from BBB-.
"To date, the increased collateral calls have been immaterial and below the previously indicated range of US$100 million-US$200 million. The current low price environment continues to offer opportunities and plays to our strengths as an asset-light supply chain manager," Noble said in its statement on Thursday.
S&P's downgrade comes on the back of a similar move by Moody's Investor Service in December last year.
On Thursday, however, Fitch Ratings put out a note, saying that Noble's increased collateral requirements are "manageable", given the commodity trader's improved liquidity following asset sales.
"We welcome Fitch's belief that the additional collateral requirements from a credit rating downgrade can be adequately covered following our disposal of Noble Agri Limited," Noble said.
"We would like to reiterate that once the proposed Noble Agri deal closes, our rating metrics will substantially exceed those required of an investment grade credit. We remain confident that the deal will be approved by our shareholders and will close before the end of February."
On Thursday, Noble's counter revisited 2008 lows, slumping as much as 12 per cent before closing 9.2 per cent lower at 34.5 Singapore cents.