Noble

Noble: S&P further downgrades Noble's credit rating to BB-
Barely under a two-month span, credit rating agency S&P has further downgraded Noble Group's long-term corporate credit rating to BB- from BB+ on the company's volatile earnings, and its higher-than-expected trading position.

The outlook for Noble is negative, especially during a crucial period when the company is seeking to refinance its short-term revolving facility of US$1.2b with its banks.

The unexpected net loss for 2015 highlighted the limited visibility and transparency around Noble's earnings, given its complex physical contracts book and derivatives programme.
Further, the group has significant long-dated contracts that are not fully hedgeable and the value of which relies on input assumptions that are not market-observable.

S&P would not rule out further asset impairments, given the depressed commodity prices. While Noble's price assumptions on its long-dated contracts are now at levels that are much more aligned with market prices, no provisions has been taken on anticipated further price declines or counterparty defaults.

The previous rating cut by S&P was on 8 Jan, when the group's rating was cut to BB+ (junk) from BBB-, which resulted in the counter to fall as much as 11.6% on the day.