Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Noble Group: Official Debt Restructuring In Motion Part II

Noble Group: Official Debt Restructuring In Motion Part I

Noble Group: Moving Forward With Expected Obstacles

Asia ex-Japan Credit - Analyst, Bondcritic

Brayan Lai

Asia ex-Japan Credit - Analyst

Credit

We continue our coverage on <a href="https://www.smartkarma.com/entities/378" target="_blank" data-smartkarma-citation="entities:378:1">Noble Group Ltd (NOBL SP)</a> (“Noble”) with our recommendations under continuing review on the NOBLSP complex given its impending debt-to-equity swap/debt exchange and restructuring into New Noble (“Newco”) bonds.
With the recent run of events and negotiations among all of the company’s vested interest groups over the last few months, it would finally appear that the company’s restructuring is nearing completion. This was affirmed by the recent unanimous vote at the recent SGM where 30.4% of shareholders (consisting of original Noble founder Richard Elman, Goldilocks Investment Company – “Goldilocks” and the junior-subordinated consortium) had already signed irrevocable undertakings committing to the company’s restructuring. As such, we take the opportunity to take stock of immediate next steps for the company, document our market observations and update our Newco debt pricer with Scenario B (without the 75% quorum from NOBLSP perp holders) – changes include the additional USD20m in size to the Trading Holdco bond and priority redemption schedule added to the Asset Co Bond.
With regard to the <a href="https://www.smartkarma.com/entities/526" target="_blank" data-smartkarma-citation="entities:526:1">Deutsche Bank Ag Registered (DBK GR)</a> (“DB”) tender offer for NOBLSP 18, 20 and 22 – we have only two words to offer, that being, strong conviction. Having said that, we suspect that the long talked about strategic investor is coming back to the fore (but not for the near immediate future).
At this stage, we do not think there are any other major complications which may further stall Noble’s restructuring (despite the remaining moving-parts). The last (and lowest negotiating power, in our view) vested interest group, the NOBLSP perp holders have yet to provide official buy-in for the restructuring (with the exception of the junior-subordinated consortium). Even without the quorum required, the company has already provided for an alternative solution (for right or wrong reason, which would have been offered to shareholders as well), therefore we do not expect any major time delay. With the procedural aspects gradually being checked-off, it would be a return to “business-as-usual” and focus on revenue/cashflows. That said, the restructuring will provide Newco 12-18mths of time to redefine itself and create sustainability (that in itself is the next major challenge which would be the key to any further value).

We continue our coverage on Noble Group Ltd (NOBL SP) (“Noble”) with our recommendations under continuing review on the NOBLSP complex given its impending debt-to-equity swap/debt exchange and restructuring into New Noble (“Newco”) bonds.
With the recent run of events and negotiations among all of the company’s vested interest groups over the last few months, it would finally appear that the company’s restructuring is nearing completion. This was affirmed by the recent unanimous vote at the recent SGM where 30.4% of shareholders (consisting of original Noble founder Richard Elman, Goldilocks Investment Company – “Goldilocks” and the junior-subordinated consortium) had already signed irrevocable undertakings committing to the company’s restructuring. As such, we take the opportunity to take stock of immediate next steps for the company, document our market observations and update our Newco debt pricer with Scenario B (without the 75% quorum from NOBLSP perp holders) – changes include the additional USD20m in size to the Trading Holdco bond and priority redemption schedule added to the Asset Co Bond.
With regard to the Deutsche Bank Ag Registered (DBK GR) (“DB”) tender offer for NOBLSP 18, 20 and 22 – we have only two words to offer, that being, strong conviction. Having said that, we suspect that the long talked about strategic investor is coming back to the fore (but not for the near immediate future).
At this stage, we do not think there are any other major complications which may further stall Noble’s restructuring (despite the remaining moving-parts). The last (and lowest negotiating power, in our view) vested interest group, the NOBLSP perp holders have yet to provide official buy-in for the restructuring (with the exception of the junior-subordinated consortium). Even without the quorum required, the company has already provided for an alternative solution (for right or wrong reason, which would have been offered to shareholders as well), therefore we do not expect any major time delay. With the procedural aspects gradually being checked-off, it would be a return to “business-as-usual” and focus on revenue/cashflows. That said, the restructuring will provide Newco 12-18mths of time to redefine itself and create sustainability (that in itself is the next major challenge which would be the key to any further value).

Noble Group: Sighting the End of the Restructuring Road