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Downgraded Noble says rating metrics will improve after agri deal closes

Wednesday, December 30, 2015 - 08:13

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Noble Group Ltd, the commodity trader whose credit rating was cut to junk by Standard & Poor's on Thursday, will receive about US$200 million after selling receivables to shore up its balance sheet, according to people with knowledge of the matter.

SELLING off its agriculture trading unit seems insufficient for commodities trader Noble Group to rescue itself from being downgraded to junk status by one of the three major credit ratings agencies.

But Noble believes its rating metrics "will substantially exceed those required of an investment grade credit" once its Noble Agri deal closes, the company said in a press release on Wednesday morning.

It said this after Moody's downgraded its credit rating on Noble Group to junk status on Tuesday with a negative outlook, citing concerns over the group's liquidity, profitability and cash flow.

Noble said it was "confident that the deal will be approved by our shareholders and will close before the end of February ... It is unfortunate that this transaction has seemingly, in our view, been outweighed by Moody's negative view of the commodity producer segment".

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It added that since it was an asset-light supply chain manager, the current environment of low commodity prices would lower the working capital needed to support its business.

Noble sold its remaining stake in Noble Agri for US$750 million in cash earlier this month to China's state-owned grain trader Cofco.

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