Noble Group Bonds at 53 Cents Push Debt to Distressed Grade
- Debt now in the same league as Venezuela and Toys `R' Us
- Company's one-year CDS more expensive than five-year
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Bond investors are indicating they expect Noble Group Ltd.’s troubles to get worse as a selloff in its notes sent them into distressed territory.
The commodity trader’s dollar bonds due in 2020, its most liquid, rose 1.4 cents on the dollar to 55.2. They dropped below 53 earlier to their lowest on record, implying a yield of about 26 percent for the company’s debt. That puts it on par with issuers such as the Republic of Venezuela and U.S. retailer Toys “R” Us Inc., which rating firms have indicated are likely to miss debt payments in the short term. Noble Group has also become the riskiest company in Asia to hedge against nonpayment of debt based on credit-default swaps contracts.