Noble Group Completes Upsized $1.1 Billion Credit Facility

  • Noble Americas and Noble Petro to use the funds, company says
  • Facility increased from initial $450 million, Noble says

Noble Group Ltd., the Singapore-listed commodity trader that’s been fending off attacks on its accounting practices, said it completed a $1.1 billion revolving credit facility, citing strong support from lenders.

The funds will be used by units Noble Americas Corp. and Noble Petro Inc. as working capital and trade finance, the company said in a statement on Monday. The facility was increased from an initial $450 million to the final sum amid strong support, Noble said.

Noble stock slumped to the lowest close since 2008 this month amid criticism from a group calling itself Iceberg Research and investor concern that slumping commodity prices may hurt its business. Chief Executive Officer Yusuf Alireza has been fighting back, boosting transparency and vowing in August to increase the focus on businesses that can deliver results immediately. Jefferies Group LLC issued a “buy” call on Noble last week, saying recent losses were overdone.

‘Good News’

“This refinancing is good news,” Bernard Aw, a strategist at IG Asia Pte, said by phone. “There have been concerns as to whether they can get enough funding for their operations. The absence of any downgrades to their credit rating certainly helps.”

While Moody’s Investors Service and Standard & Poor’s Ratings Services have both cut their outlooks for Noble’s debt rating to negative this year, Alireza said in August that the moves won’t result in an actual downgrade.

The new facility was supported by six main banks led by Bank of Tokyo-Mitsubishi UFJ Ltd. and Societe Generale SA as joint lead arrangers and joint bookrunners, according to the statement.

While Noble remains the worst performer this year on the benchmark Straits Times Index, the shares have rallied the most among index members this month. The stock surged 7.5 percent last week to close at 50.5 Singapore cents, after advancing 19 percent the week before. It closed unchanged in Singapore trading on Monday.

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