Iceberg Research

Downgrade of Noble Group to junk by credit agencies

January 7, 2016

S&P has downgraded Noble Group to junk today, following a similar move by Moody’s.

The downgrade validates one of our main arguments against Noble: this company has never been investment grade. In fact, the question is why did it take so long when it was clear that Noble has been bleeding cash for years, and after we showed that profitability was supported by dubious mark-to-market?

The decision will have an important impact on Noble’s liquidity and the perception of its creditors. This further complicates the refinancing of its debt. Noble’s annual results will soon be audited and we doubt that this time, EY will take more legal risks when they sign off on the accounts.

The financial manipulations were conducted to artificially preserve the investment grade rating. The accounting illusion is now over. With a share price down 71% since our first report, and strong doubts over the balance sheet, Noble is facing an even more acute crisis. The group is slowly moving toward bankruptcy.

Most of our arguments on Noble’s accounting have already become facts. This management has completely lost credibility. It is urgent for Noble’s stakeholders to replace Mr. Elman and Mr. Alireza before the company sinks with them.


  1. The sale of Noble Agri is absolutely an awful deal, they’ve changed 1 dollar for 50 cents.
    Rather than protecting their IG rating, they have deteriorated their own financials, precipitating the decisions by Moody’s and Standard & Poor’s to downgrade the company credit rating to junk status.
    I can hardly explain why a company would do that, but plainly this is what they did.

    It certainly has something to do with the business risk profile of the company.

    To begin with, I would characterize Noble Group as a Hedge fund charging a 11% gross management fees p.a. consistently losing money in real terms.

    Noble is a prime example of an organization engulfed by traders-poor businessmen placed at the top of the management.

    In the Martin Scorsese’s movie Casino, the Mob is knocked out of power the old casinos are purchased by big corporations and demolished to make way for gaudier gambling attractions financed by junk bonds.

    Perhaps it could depict how, IBs after 2008, have jumped into the gleaming arena of commodities, they got hired or bought stakes in the houses, internally crashing the house, wiping out each single profitable business line that you can ever imagine.

    Simon Jacques

    1. Simon is brilliant..

      “To begin with, I would characterize Noble Group as a Hedge fund charging a 11% gross management fees p.a. consistently losing money in real terms.”

      Love it!



  2. ….in 2012 Mr. Banga stepped down and away from Noble, as co-founder…..there are enough skeletons to man an entire ghost fleet..yes indeed, this manage t has lost credibility..

  3. …and Mr. Will Randall, the architect of their convoluted and poorly constructed “house of cards” known as hard assets..

    1. Mr Randall hasn’t nearly received the amount of attention he deserves for his very central role in this strategy….

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