Thursday, June 16, 2016

Noble

Noble: (S$0.23) S&P cuts rating deeper into junk; outlook negative
- Dealt another blow as S&P cuts its credit rating deeper into junk territory to B+ from BB-, with negative outlook.
- Ratings agency also warned that it could reduce the rating further over the next 12 months.
- Reflects the commodity group's weakened liquidity position despite the recent refinancing of its revolving credit facilities and its proposed $500m fully underwritten rights issue.
- The downgrade is expected to see funding costs rising, and further erode its razor thin margins.
- At current price, Noble is trading at 0.37x P/B, just a slight discount to closest competitor Glencore’s 0.67x, which is backed by an investment grade credit rating.

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