Moody's cuts Noble Group

Moody’s Investors Service said it downgraded Noble Group Ltd.’s senior unsecured bond ratings to Ba1 from Baa3 and the provisional rating on its senior unsecured MTN program to (P)Ba1 from (P)Baa3.

At the same time, Moody's assigned a Ba1 corporate family rating to Noble and has therefore withdrawn the company’s issuer rating.

The rating actions conclude Moody’s review for downgrade initiated on Nov. 16.

The outlook is negative.

“The downgrade of Noble’s ratings reflects Moody’s concerns over the company’s liquidity,” said Joe Morrison, a Moody’s vice president and senior credit officer, in a news release.

Moody’s said the Ba1 ratings also reflect low levels of profitability and consistent negative free cash flow from core operating activities, which exclude 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,” Morrison said.

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