It seems to be saying everything we are all saying from what I gather. IOW FMG has been marked down for having a go for AGO but if it comes off, BHP and RIO's SPs are bound to come down as their earnings will take a hit from a player, FMG (Comb) that has both high grade and low grade.
At the moment, BHP and RIO are immunized from FMG and Vale because FMG and Vale are low grade whereas AGO would give FMG the capacity to compete or break up the duopoly of BHP and RIO by having both grades and both products out in the P.R.C, India and the rest of the world.
BHP and RIO will want FMG to lose out from buying AGO.
The debt is the debt and S&P is just a contributor for credit ratings, we all know how well they went in 2007-2009. The Great Recession followed.
FMG combining AGO would be a good thing IMHO. Perhaps not if u r a RIO or BHP/BLT supporter. AGO holders might have to satisfy themselves with FMG script, better than nothing?
