Moody’s rates Noble notes B2

Moody's Investors Service said it assigned a B2 rating to the dollar-denominated senior unsecured notes to be issued by Noble Group Ltd.

The outlook remains negative.

The rating reflects Noble Group's large scale and product and geographic diversity, tempered by weak and volatile cash flow and pressure on liquidity, Moody’s said.

The proposed notes are credit positive because the proceeds will be used to refinance existing short-term debt and secure longer term funding, thereby partly alleviating pressure on its liquidity, the agency explained.

Moody's said it expects Noble's adjusted net debt-to-EBITDA ratio to trend down in 2017 toward 7x from about 7.6x in 2016 on moderately improving earnings.

This level of leverage remains weak for the B2 rating category, the agency said.

The sustainability of profitability and cash flow for the company also remains uncertain, given the unfavorable operating environment and the loss of profits and cash flow contribution resulting from the sale of the Noble Americas Energy Solutions business, Moody’s added.

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