Beleaguered commodities trader Noble Group is at another risk of losing an investment grade rating, this time from Standard and Poor's—just a week after rival ratings agency Moody's triggered a similar assessment.
S&P now has a BBB- rating on Noble's long-term corporate credit and on the company's senior unsecured notes, the lowest ranking on the agency's investment-grade scale. These ratings are now on review with negative implications.
"The liquidity position of Noble has deteriorated, in our view, because of a reduction in the Hong Kong-based commodity trader's adjusted readily marketable inventory and committed undrawn credit facilities," said S&P in an announcement Monday.
A rating cut from its S&P rating to junk territory will likely increase Noble's borrowing costs and make it harder to refinance debt to shore up its finances.
S&P said that the company's liquidity worsened in the third quarter of 2015 following at 27 percent decline in its net available readily marketable inventory to $1.48 billion as of September 2015 from $2.0 billion in June 2015, mainly due to the broad-based slump in commodity prices.