Noble Group agrees on US$3 billion credit facilities with lenders

The company logo of Noble Group is displayed at its office in Hong Kong, China, on Jan 22, 2016.
The company logo of Noble Group is displayed at its office in Hong Kong, China, on Jan 22, 2016.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - Noble Group Ltd. arranged two credit facilities totaling US$3 billion (S$4.1 billion), clearing a hurdle in efforts led by Chief Executive Officer Yusuf Alireza to turn around the junk-rated commodity trader.

The facilities comprise a US$1 billion unsecured loan that's supported by 25 banks, and a US$2 billion revolving borrowing-base facility, or BBF, the company said in a statement on Thursday. The Hong Kong-based trader, which reported quarterly earnings on Thursday, didn't disclose the cost and terms.

Noble said first-quarter profit fell 62 per cent with net income in the three months ended March coming in at US$40 million, compared with US$107 million a year ago. Revenue declined 32 per cent to US$11.4 billion from US$16.6 billion.

Noble Group's fresh financing follows cuts in its credit rating to junk by Moody's Investors Service Inc. and S&P Global Ratings amid a rout in raw-materials prices. Fitch Ratings Ltd. has placed the company on negative watch.

The US$2 billion BBF facility will be used by Noble Americas Corp., Noble Petro Inc. and Noble Americas Gas & Power Corp. to fund U.S. business requirements, according to the company statement.

"The BBF allows for the issuance of trade-finance instruments, such as letters of credit, as well as for loans," Noble Group said. "The transaction is supported by a group of core banks led by Bank of Tokyo-Mitsubishi UFJ Ltd. and Societe Generale as joint lead arrangers and joint bookrunners."