S&P Global Ratings and Moody's Investors Service again cut their ratings on Noble Group as they expect the commodity trader will not be able to meet its debt obligations in the next six months.
The ratings were cut two notches by S&P and Moody's late on Monday, pulling them deeper into junk territory and closer to the likelihood of default.
The Hong Kong-based trading house, which has been hammered by two years of attacks on its accounting during a commodity slump, posted a net loss of US$1.75 billion in the second quarter.
"The increased losses reflect in part a loss of confidence among Noble's lenders, suppliers, customers, and other counterparties," Moody's Investors Service said in a statement.
The company, which commenced its strategic review earlier this year, has been forced to shrink its business, exiting loss-making and non-core operations in order to survive.
Last month, Noble Group said it would sell its remaining North American gas and power business and reduce 56 percent of its workforce in a bid to reduce debt.
"However, it is uncertain whether these sales will raise sufficient proceeds to meet its debt maturities and cash outflow over the next 12 months," Moody's said.
Moody's believes Noble has $2.6 billion in bank debt and bonds due in the next 12 months. Its liquidity headroom — including readily available cash and unutilized committed facilities — fell to $1.4 billion at end-June 2017 from $2.4 billion at end-March 2017.
"We could lower the rating on Noble if the company announces it will not be able to meet its interest or debt repayment obligations, or if we view default or distressed exchange is a virtual certainty," S&P said in a statement.
Noble Group's shares fell as much as 4.3 percent to 42 Singapore cents on Wednesday.
