Noble's lenders matter more than its credit score

Hong Kong

FOR Noble Group, banks matter more than rating agencies. On Thursday, Standard & Poor's followed rival Moody's in cutting the energy and metals trader to "junk", despite it raising US$750 million from the sale of its agricultural affiliate last month. That is a further blow to sentiment but what really counts is that lenders remain supportive.

S&P's downgrade helped lop another 5.8 per cent off Noble's shares by noon in Singapore on Friday. That hurts, especially as accounting concerns and the continuing commodity rout have already hammered Noble. The company's market value has crashed to US$1.5 billion from US$5.6 billion in a year while its five-year bonds now yield a hair-raising 24 per cent.