I get your angle, but successful business do this all the time....

I get your angle, but successful business do this all the time. We understand the economics of
iron ore and how lucrative FMG is for us all and continues to be. With exception to said down rampers who likely lost money or run a well organised shorting business ( I suspect the later).
I have sold all sorts of variations of these types of products and to be frank, it is not always entirely transparent what the funds are used for - most buyers look at the fundamentals of the business and the risk profile and make a simple risk/return decision. Is this right ? Not sure, but for many wholesale investors, instos etc this is fine. We don’t need to know the purpose of every single dollar spent.
It’s also unlikely to be possible,

Agreed Convexity, typically these notes will rank above ordinary shares on the capital stack should the company be wound up & it will provide a more constant stream of income over the duration of the debt than ordinary dividends. Overall it won’t change much.


This program will absolutely be oversubscribed significantly and secondly it makes sense to issued debt whilst we are a very profitable business and our sales are growing, our roe is good and the price of iron ore is and upward swing - the market will pay more for the debt ( accept a lower return), which means that FMG will pay less and that is ultimately a win for all FMG holders.

Finally agree with other re Debt, not all debt is bad. In fact debt is necessary and well allocated & costed can be a cheap way to fund expansion capex what ever is needed. If I can lock down my cost of funds below my roi, hey presto!