Noble delivers consistently strong financial results by managing its basics: an asset-light investment strategy, ample liquidity, access to stable funding and a prudent capital structure. Our continued and sustained focus on reducing costs, through incremental improvements in operational efficiency and larger cost reduction initiatives, allowed us to achieve significant Group-wide savings against the backdrop of a challenging global economy. These efforts support our commitment to maintaining a strong balance sheet and investment grade ratings, while we continue to develop diverse funding opportunities to drive our long-term growth.
Noble has access to a diverse range of funding sources which include the bank syndicated loan market, corporate bond market and equity capital markets. Our investment grade ratings from Moody’s, S&P and Fitch support our access to capital and liquidity.
In May 2013, we closed US$2,055 million in committed unsecured revolving credit facilities comprising a US$1,017 million facility and a US$488 million three-year facility. The transaction was substantially over-subscribed with a total of 72 banks participating in the transaction. In December 2013, we also closed a US$650 million three-year unsecured term loan facility in which 10 banks participated.
Noble raised US$760 million in the global corporate bond markets in 2013, accessing both the international US dollar market and local currency markets, further diversifying our sources of capital. We accessed the funding market opportunistically during 2013 with the aim of lowering our average cost of debt. During 2013 we issued a MYR300 million Sukuk due 2016, a CNY1,000 million bond due 2016, a US$400 million bond due 2018 and a THB 2,850 million bond due 2016. We continue to look for competitive refinancing options from a variety of liquidity sources that allow us to reduce cost.
Liquidity & debt profile
We have relationships with over 100 banks around the world that provide us with over US$18 billion in committed and uncommitted bank lines. Our bank lines have grown over the past couple of years despite the turbulence seen in the global financial markets.
The Group’s total committed and uncommitted bank facilities of US$18 billion comprise US$7 billion in committed facilities and US$11 billion in uncommitted facilities. As of 31 December 2013, of the US$18 billion bank facilities, US$7 billion was utilised which consisted of US$2.5 billion in committed facilities and US$4.4 billion in uncommitted facilities.
The Group’s industry-leading level of liquidity headroom – the sum of readily available cash and unutilised committed facilities – is a core competitive strength and stood at US$5.7 billion as of the end of 2013.
Asset re-cycling & investment
As supply chain managers, we operate an asset-light strategy that allows us to secure access to product flows without the need to fully own upstream assets. In some cases, we have minority shareholdings or provide funding support, whether directly or indirectly, in exchange for long-term offtake or marketing agreements. These arrangements provide us with the security of product to deliver to our customers and also eliminate the possibility of potential conflicts of interest with our suppliers – positioning Noble as the supply chain manager of choice.
We focus our investments on assets that support the product flows and distribution channels of our supply chains. We also develop our investments up to the point where the capital can be recycled and reinvested to support growth and generate income opportunities elsewhere.
Through the asset re-cycling model, Noble finances, manages and markets resources while helping assets develop significant market share.