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Noble Group default risk flares as loss warning deepens crisis

Bloomberg Published on Thu, Jul 27, 2017 / 6:51 PM GMT+8

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(July 27): Noble Group Ltd.’s crisis escalated as Moody’s Investors Service Inc. flagged an elevated risk of default after the embattled Hong Kong-based commodity trader warned of a quarterly loss of as much as US$1.8 billion ($2.45 billion) and announced more asset sales.

“The further expected deterioration in Noble’s financial results in the second quarter of 2017 suggests that default risk will remain elevated,” Gloria Tsuen, a Moody’s vice president and senior analyst, said in a statement as the company’s shares tanked in Singapore. The stock lost as much as 49%, with investors zeroing in on a bond coupon due on Saturday.

Noble Group has been under siege for more than two years, marked by vast losses, mounting concern it will default and accusations it inflated the value of some contracts, which it’s denied. On Wednesday, it warned of the second-quarter loss, and said it’ll sell its gas-and-power unit and plans to dispose of its oil-liquids business. Moody’s warned that Noble Group’s reduced scale may complicate its efforts to pay off debt.