Noble's liquidity just enough to support rating: Fitch

COMMODITY trader Noble Group has enough liquidity to cover its short-term commitments in the next 12 months, credit agency Fitch Ratings said in a note on Friday. This, along with operational improvements, supports Noble's rating of BBB- with a stable outlook, Fitch said.

Even so, any weakening in Noble's liquidity position could result in negative rating actions, Fitch added.

"Noble's immediate liquidity need is the repayment of the US$458 million senior notes due within the next half year, which it has the cash to do so," Fitch said.

"Its US$2.5 billion short-term bank debt at end-Q3 2015 remains at an elevated level as the company attempted to reduce finance costs by switching from capital financing to bank debt financing in 2015. Fitch believes this will keep Noble's short-term debt at a higher level than the historical trend of around US$1.4 billion-US$1.6 billion prior to 2015."

Fitch added that it would closely monitor Noble's ability to improve its liquidity headroom. The credit agency may also reassess Noble's operational risks if "the losses in the metals segment persist or if the increase in operating income fails to consistently match the increase in its volume".

On Friday, Noble's shares were down one Singapore cent to 41.5 Singapore cents as at 11.20am.

On Monday, ratings agency Moody's said that it was reviewing its rating of Noble for a potential downgrade in light of the company's latest results. Currently, Noble's current Moody's rating is Baa3. The ratings agency changed Noble's outlook to negative from stable in August.

Since then, Noble has said that it is "confident" of meeting Moody's targets.