Can Noble Group control its massive debts?
It needs to pay US$458m in six months.
Noble Group has just enough resources to cover its short-term debt, but analysts at Fitch warn that the struggling commodity trader must watch out for any weakening in liquidity position.
Noble needs to repay USD458m senior notes due within the next six months, which can be done with the company's available cash.
However, Fitch looked at the probability that Noble will use bank debt financing to pay off these notes, which will bring its total bank debt to US$3.9b.
This bank debt can then be covered by its USD4.4bn committed facilities, and USD1.6bn of senior debts that will be due in 2018 and 2020.
Its unrestricted cash and equivalents of USD975m plus the excess of committed facilities over its total bank debt of USD1.5bn is 86% of its inventory level; giving Noble liquidity headroom to cover any liquidity need arising from commodity price movements.
“However, any deterioration of the company's liquidity profile - especially a further deterioration of committed undrawn facilities - is likely to result in negative ratings action,” said Fitch.