February 26, 2016 / 2:12 PM / 2 years ago

S&P downgrades Noble Group's rating further into junk, outlook negative

The company logo of Noble Group is displayed at its office in Hong Kong, China January 22, 2016. REUTERS/Bobby Yip

SINGAPORE (Reuters) - Ratings agency Standard and Poor’s cut Singapore-listed Noble Group’s (NOBG.SI) credit rating further into junk territory on Friday and described its outlook as negative.

S&P said it had cut Noble’s long-term corporate rating to BB- from BB+. Fellow ratings agency Moody’s this week lowered its rating on the commodities’ trader to Ba3 from Ba1.

“We downgraded Noble because of the company’s volatile earnings and high trade risk position, as reflected in its large marked-to-market loss in 2015,” said Standard & Poor’s credit analyst Cindy Huang.

Noble swung to a net loss of $1.67 billion in 2015, its first annual loss in nearly 20 years, battered by a $1.2 billion writedown on weak coal prices.

The company, one of the biggest traders of commodities from coal to iron ore to oil, is battling to boost investor confidence after a bruising accounting dispute and weak markets.

S&P said in its latest statement that the unexpected loss highlights the limited visibility and transparency around Noble’s earnings.

“Recent negative developments weaken the company’s position in its discussions with banks and could affect financing terms, in our view,” it said, adding that short-term liquidity risk appears to be manageable.

On Thursday Noble said it expects to refinance its debt ahead of schedule after analysts raised concerns about its refinancing ability in view of the Moody’s downgrade and weak earnings.

Reporting by Saeed Azhar and Lee Chyen Yee; Editing by David Goodman

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