FITCH Ratings has downgraded the long-term issuer default rating of Hong Kong-based commodities trader Noble Group Limited to "BB+" from "BBB-" with stable outlook.

It also downgraded the senior unsecured ratings to "BB+" from "BBB-", and removed the ratings from Rating Watch Negative.

This reflects Fitch's expectation that Noble's debt structure is shifting towards shorter-term financing to complement its asset-light business model that focuses on working-capital management, and to reduce overall finance costs. This will result in a weakening debt maturity profile, which Fitch deems to be no longer consistent with an investment-grade rating.

The stable outlook reflects Noble's continuous improvements in its balance sheet and its commitment to maintaining sufficient liquidity to cover its working-capital needs, Fitch said in a note on Tuesday.

The credit rating agency noted that Noble's current liquidity stands at US$1.86 billion (comprising of US$862 million of unrestricted cash and equivalents and US$1 billion of undrawn committed facilities), down from US$2.16 billion at year-end 2015. This is equivalent to 1.25 times inventory, which is deemed sufficient to cover requirements arising from reasonable commodity price increments.

"However, we do expect this ratio to decrease in the short-term after repayment of its debt totalling approximately US$1.6 billion in May. This temporary reduction in liquidity headroom is partially relieved by a potential drawdown from its newly signed US$2 billion borrowing base facilities, and will increase post-realisation of planned equity placement and non-core asset sales."