Embattled commodities trader Noble Group has started the year on another credit rating cut, after Standards and Poor's downgraded the company to junk status.
Noble shares on the Singapore Exchange tanked as much as 10 percent to the fresh seven-year low of 31 Singapore cents each shortly after opening on Friday.The company's most liquid dollar bonds due in 2020 also dropped to their lowest on record.
"We downgraded Noble because the company's liquidity is below what we expect for a strong liquidity position, despite the sale of its agricultural unit," S&P credit analyst Cindy Huang said.
"In our view, the company's credit standing in the capital markets and with lenders has weakened, reflected in its depressed securities prices."
The cut to junk territory will likely increase Noble's borrowing costs and make it harder for the trader to refinance debt to shore up its finances.
Noble shares have fallen 70 percent in the last year, since a firm called Iceberg Research published a report alleging that the Singapore-listed trader's accounting treatments were "unusual," result in "fabricated" profit and "intentionally misleads credit agencies and investors."