Noble seeking commitments on increased US$3b refinancing

[HONG KONG] Noble Group Ltd is now seeking an increased size of US$3 billion to refinance debt coming due in May, even as it remains embroiled in a controversy over an obscure research firm's allegations of employing improper accounting rules, Thomson Reuters LPC reported.

The commodities trader is expected to come out with a term sheet imminently and finalise terms on the loan within a couple of weeks. The borrower has gone out with a wish-list in terms of size and tenor and is expected to finalise the terms soon.

Noble has asked banks to commit US$150 million each on the financing, which will have tenors of one and three years.

The loan comes in the wake of Iceberg Research's allegations that Noble used accounting techniques to mislead markets. Late last month, Noble reported its first quarterly loss in three years due to asset writedowns.

In an earnings call on Feb 26, the company rejected the allegations and said the US$438 million writedown, of which US$200 million was related to ASX-listed Yancoal Australia Ltd, was not connected to Iceberg's report.

Funds from Noble's new loan will refinance a US$2 billion 364-day revolving credit, signed in May 2014, as well as the three-year tranches of a multi-tranche loan of about US$2.36 billion, signed in May 2012.

The May 2012 loan comprised a $973 million 364-day revolving credit, a 159 million euro (US$173 million) 364-day revolver, a US$992 million three-year revolver, and a 155 million euro three-year revolver.

The May 2012 facility saw 57 lenders participate. The three-year tranches of the facility paid a top-level all-in of 290 basis points, based on a margin of 220 basis points over Libor, not 190 basis points, based on a margin of 130 basis points over Libor, as reported in a story on Feb 11.

The US$2 billion 364-day revolver signed in May 2014 attracted a total of 58 lenders and paid a top-level all-in of 130 basis points, based on a margin of 95 basis points over Libor.


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