[BREAKING] Noble Group Cut to Junk by Moody

Noble Group Ltd.’s credit rating was slashed to junk status by Moody’s Investor Services, dealing another blow to the embattled commodities trader as it struggles to recover from a difficult year.

Noble has struggled this year amid allegations of accounting irregularities and falling commodities prices that have eroded its profits. The ratings firm said the downgrade reflects concerns over the Hong Kong-based trader’s liquidity as well as its low levels of profitability and consistent negative free cash flow from operations.

“The downgrade also reflects the uncertainty as to whether or not these factors can be improved sustainably and materially, given our expectations of a prolonged commodity downcycle, and the consequent negative sentiment impacting Noble and commodity traders in general,” Joe Morrison, a Moody’s vice president and senior credit officer, said in a statement.

Noble recently announced plans to sell its remaining stake in its agricultural unit, Noble Agri, to Chinese state-backed grain trader Cofco for $750 million in an effort to shore up its finances, but that ultimately wasn’t enough to prevent Moody’s from downgrading the company’s credit rating.

“Whilst we respect Moody’s decision, we are of the firm view that, once the just announced Noble Agri deal closes, our rating metrics will substantially exceed those required of an investment grade credit,” Noble said in a statement. “It is unfortunate that this transaction has seemingly, in our view, been outweighed by Moody’s negative view of the commodity producer segment,” it added.

http://www.wsj.com/articles/noble-group-cut-to-junk-by-moodys-on-liquidity-concerns-1451410703

cos we joined the dark side

Not simple..

Noble Group Ltd., the commodity trader battling criticism of its accounting, had its credit rating cut to junk by Moody’s Investors Service on concerns about the company’s liquidity amid a broad downturn in prices for energy and raw materials.

Moody’s lowered Noble’s senior unsecured bonds to Ba1 from Baa3, the ratings company said Tuesday in a statement. The outlook for the company’s new rating in negative.

Moody’s warned two months ago that it might take action. Hong Kong-based Noble appeared to counter the threat earlier in December when it agreed to sell the rest of its agriculture unit to China’s Cofco Corp. for at least $750 million. But Moody’s said Tuesday that despite that deal, the company’s liquidity is still constrained. It said Noble suffers from low profitability and negative cash flow from “core” operations, excluding the proceeds from asset sales.



"The downgrade also reflects the uncertainty as to whether or not these factors can be improved sustainably and materially, given our expectations of a prolonged commodity downcycle, and the consequent negative sentiment impacting Noble and commodity traders in general," Joe Morrison, a vice president and senior credit officer at Moody’s, said in the statement.

“While we respect Moody’s decision, we are of the firm view that, once the just announced Noble Agri deal closes, our rating metrics will substantially exceed those required of an investment-grade credit,” Noble said in an e-mailed statement. “We are confident that the deal will be approved by our shareholders and will close before the end of February.”

Noble shares have fallen 61 percent in Singapore this year amid criticism from a group called Iceberg Research, whose members are anonymous, and investor concern that tumbling commodity prices will hurt its business. Noble has rejected the allegations, and said in November it was confident that it would meet targets set out by Moody’s to maintain an investment-grade rating.

Noble’s 6.75 percent bonds maturing in 2020 have fallen 36 percent in the past year to 69.125 cents after trading as high as 114.125 cents in July 2014, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. They yield 17.7 percent.

Noble is rated BBB- by Standard & Poor’s, the lowest investment grade.

Noble CDS is now suggesting a 77% probability of default.

Heng I didn't have any noble stock

keverus jialat liao..

forcesell also not enuf cover liao..

later opening will lao sai jia lat jia lat

chao chao drop 10% today ..maybe 20

Heng my family sell off all noble shares liao.

bye bye to this stock!

next 2 yrs commodities stocks sure tank.

noble is one thing. u havent see pacific radiance... drop until going to die liao.

Most of the stock rafflesian once talked about mostly all in red now.

bye bye? don't kid yourself, even if got inquiry also no use...

lol crash to 40c

moi predict 10c in 2016

mai........
spread............ fear..........

Got 1 indo bond. now 30c/$. a lot of unker auntie die cork stand.

already priced in no?
most of the high yield issues are going to collapse once the recession comes, there is no way the companies can sustain paying out high single digits indefinitely if economic growth crashes

even Admin also support my thread... so happy

Junk bonds will be the next crisis.
2 us investment house trading in jink bonds went bust due to heavy redemption by investors.
Rising interest rates will be the killer.

if keverus never already sold off his holdings, by the time he come out i think whole thing already forcesold entirely..

Song song -1sss

temasick huat ar......

Pikasso wrote:Junk bonds will be the next crisis.
2 us investment house trading in jink bonds went bust due to heavy redemption by investors.
Rising interest rates will be the killer.

private banks are already holding back on pushing HY bonds to clients
they used to be so hot, now the RMs are scared if they default taiji really dua diao
it started with the first defaults earlier in the year by chaori solar and a few other ah tiong companies

Banks is going to pull the plug on Noble. I doubt banks will let Noble continuing to draw on their credit lines. Expect rights issue to come.