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Noble rebuts S&P downgrade

Embattled commodities trader Noble Group rebutted another big ratings downgrade yesterday. The company took to the Singapore Exchange to dismiss Standard & Poor’s (S&P) junk status rating, similar to Moody’s a week prior.

Fitch, meanwhile, provided some relief for the Hong Kong-based company with its decision to reaffirm Noble’s rating.

Noble said that once its $750m sale of Noble Agri to China’s COFCO goes through, likely before the end of February, its rating metrics will substantially exceed those required of an investment grade credit.

“The current low price environment continues to offer opportunities and plays to our strengths as an asset-light supply chain manager,” Noble said in the release.

Iceberg Research, Noble’s arch critic, commented in a note: “S&P’s decision is important. It also validates one of our main arguments against Noble: this company has never been investment grade. The financial manipulations were precisely conducted to artificially preserve this rating.

“The accounting illusion is over. With a share price down 71% since our first report, and strong doubts over their balance sheet, Noble is facing an even more acute crisis. This group is slowly moving toward bankruptcy.”

Noble Group’s shares fell as much as 10 per cent in Singapore on Friay to the lowest since 2008 with the local Business Times newspaper reporting Noble has become the riskiest company in Asia to hedge against nonpayment of debt based on credit-default swaps contracts.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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