Exclusive: Noble Group in talks with banks for $1.5 billion unsecured loan - sources

Wed Mar 16, 2016 7:00am EDT
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By Anshuman Daga and Prakash Chakravarti

SINGAPORE/HONG KONG (Reuters) - Noble Group (NOBG.SI: Quote) is in advanced talks to raise a large unsecured loan from banks that will help repay its debt maturing in May, the loss-making commodity trader's head of treasury said, a move that could help it win back investor confidence.

Noble, whose debt has been downgraded by credit rating agencies and which has been accused of inappropriate accounting, is seeking to raise $1.5 billion through a one-year loan that is not backed by assets, sources with direct knowledge of the situation said. Noble has denied the accounting claims.

If Noble is able to raise that sum, it would have met most of its upcoming debt obligations for this year, potentially allaying investor concerns that its finances are not sufficiently sound following a $1.2 billion writedown on assets and downgrades by S&P and Moody's on its debt to junk status.

Wildrik de Blank, Noble's group treasurer, declined to give details on the size of the loan, which would be structured as a revolving credit facility. "The revolving credit facility will close ahead of its May maturity and is expected to exceed our target amount," he told Reuters in an email.

The Singapore-listed company, one of the world's biggest commodities traders, is in discussions with a group of banks, including HSBC (HSBA.L: Quote), Societe Generale (SOGN.PA: Quote), Bank of Tokyo-Mitsubishi UFJ (MUFG) (8306.T: Quote) and JPMorgan (JPM.N: Quote) on the new loan, said the sources, who declined to be identified as the talks are private.

Noble will kick off the roadshows in Hong Kong next week, the sources said.

Societe Generale, JPMorgan and MUFG declined to comment on the loan, while there was no immediate response from HSBC.

Noble has around $2.1 billion of debt maturing in May and the unsecured loan will be used to partially repay that debt. This year, Noble raised $750 million by selling its stake in an agribusiness venture.   Continued...

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