Noble buys back bonds after prices hit lows on downgrades

Noble Group has bought back part of two bonds, trimming its debt after the company was hit by a commodity market downturn and attacks on its accounting practices.
Noble Group has bought back part of two bonds, trimming its debt after the company was hit by a commodity market downturn and attacks on its accounting practices.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - Noble Group bought back more of its own bonds at near-record lows after rating companies cut its credit score below investment grade in the past month.

The Singapore-listed commodity trader repurchased US$31.6 million of its January 2020 notes and US$1 million of its March 2018 debentures, according to a filing on Thursday (Jan 28).

The buyback reduced the outstanding debt to US$1.18 billion and US$379 million, respectively.

Standard & Poor's cut Noble's rating to BB+, or one level below investment grade, on Jan 7, a week after Moody's Investors Service lowered its score to the Ba1 junk level. Fitch Ratings maintained its evaluation at the lowest investment grade of BBB-.

The 6.75 per cent 2020 notes have plunged 18 cents this month to 46.2 cents on the dollar as of 10:40 am in Hong Kong, according to prices compiled by Bloomberg, and reached an all-time low of 40.2 cents on Jan 21. The 3.625 per cent 2018 notes traded at 47.5 cents, having dropped 19 cents since Dec. 31.

Noble is holding a meeting of shareholders in Singapore on Thursday to seek approval for the sale of its 49 per cent stake in Noble Agri Ltd to China's Cofco Corp for at least US$750 million, a sale it said will help improve its creditworthiness. The Chinese food company bought a 51 per cent stake from Noble Group for US$1.5 billion in 2014.

Noble shares opened down 1.8 per cent at 27 Singapore cents, near a more than 12-year low of 26.5 cents hit earlier in the month. They were trading unchanged from Wednesday's close at 27.5 cents at 11.14am.