ENERGY & OFFSHORE | Staff Reporter, Singapore

Investors are terrified of Noble Group's debt

The market thinks it's going to default.

The prices of Noble Group's bank debt illustrate that investors are still unimpressed with the company's financials, according to a report by Bloomberg.

Bloomberg reported that a parcel of about $15 million of a group credit facility that matures on April 17 traded at about 75 cents on the dollar last week. The parcel is part of a $2.3 billion revolving credit line that Noble Group borrowed in 2015.

“A bank selling in the 70’s is either having its own issues or is clearly worried of deeper and longer issues at Noble,” said Robert Southey, who trades distressed loans as managing partner at London-based Trench Capital Partners LLP. The market sees the company “as having inability or difficulty refinancing this year, leading to debt restructuring and perhaps a haircut,” he said.

“That sale at about 75 cents on the dollar is telling you that a large part of the credit market thinks that the company is going to default,” said Gillem Tulloch, founder of Hong Kong-based GMT Research Ltd., who has criticized Noble Group’s financials. “The market is just unfavorable towards commodity companies.”

Read the full report here

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