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Moody's downgrades Noble
Moody's Investors Service said it downgraded Noble Group Ltd.'s senior unsecured bond ratings to Ca from Caa3, along with the rating on its senior unsecured medium-term note program to provisional Ca from provisional Caa3.
Moody's also said it affirmed Noble's Caa3 corporate family rating.
The outlook remains negative.
The downgrades follow news of Noble's financial restructuring, Moody's said.
The company announced that it reached an in-principle agreement with a group of its senior debt holders, the agency said.
Under the agreement, Noble's senior debt will be reduced to $1.7 billion from $3.4 billion, Moody's noted, and existing senior debt holders will receive 70% equity ownership in the restructured company, 90% or $180 million in preference shares in the restructured company and distributions of any cash in excess of cash to be used as working capital and for operating expenses.
Noble also seeks to launch an agreement for its existing senior debt holders to vote in favor of the proposed restructuring and to commence implementation, the agency added.
If successful, the transaction will constitute a distressed-debt exchange, which is a default event under Moody's ratings criteria, the agency explained.
The downgrades consider this default and an assessment of the high economic loss incurred when compared to the original payment promises, the agency said.
The ratings also reflect the continued high operating challenges facing the company, Moody's said, and uncertainty over the timing and outcome of the restructuring.
If the restructuring is successful, the agency said it could significantly improve Noble's financial and liquidity profile.
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