Fitch puts Noble ratings on negative watch on financing concerns

SINGAPORE (BLOOMBERG) - Fitch Ratings Ltd. placed Noble Group Ltd.'s ratings on negative watch as Asia's largest commodity trader is seen to face less financial flexibility amid a challenging market.

Noble's long-term issuer default rating, senior unsecured rating and debt ratings of 'BBB-' are being placed on rating watch negative as Fitch expects the company "will focus more on shorter-term and secured financing to lower financing costs amid a difficult operating environment," the ratings firm said in a statement Friday.

The negative watch will be resolved when Noble completes the refinancing its committed bank facilities due this month, and on the announcement of its quarterly results, Fitch said. The resolution will also reflect the agency's revised assessment of Noble, including taking into account of its focus on short- term debt financing in the future and its improved balance-sheet structure after it repaying debt, Fitch said.

Noble is seeking to chart a recovery in 2016 after a savage year in which it posted the first annual loss in almost two decades, had its credit rating cut to junk and saw its shares sink along with a rout in raw material prices. While the costs of the group's revolving-credit facility are seen rising, its weighted average cost of debt is expected to remain about the same, Chief Executive Officer Yusuf Alireza said last month.

Noble's shares, which plunged 65 per cent in 2015 and were removed from the blue-chip Straits Times Index, have climbed 1.3 per cent this year to 40.5 Singapore cents by the close of Friday trading on the city's bourse.