Fitch downgrades Noble, debt to BB-

Fitch Ratings said it downgraded Noble Group Ltd.’s long-term foreign-currency issuer default rating to BB- from BB+.

The outlook is negative.

At the same time, the agency downgraded Noble's senior unsecured rating and the ratings on all its outstanding senior unsecured notes to BB- from BB+.

Fitch said the downgrade follows Noble's sustained weak return generation, as measured by EBITDA/working capital, exemplified by its 2017 first-quarter losses. The agency believes this may make it difficult for the company to continue accessing finance on an unsecured basis and for its return generation to revert to previous levels due to the challenging operating environment. Noble has adequate liquidity to cover debt maturities in 2017, but will need to source external financing in the first half of 2018, when debt totaling about $1.5 billion is due.

The negative outlook reflects the lack of visibility on the recovery of Noble's operating income from supply chain and operating cash flow in the next six to 12 months, Fitch added.

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