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Well fingerscrossed I think this article says it all -----
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BlueScope still on rating watch negative

"October 10, 2006 - 4:44PM

Ratings agency Fitch Ratings will maintain a negative rating watch on BlueScope Steel Ltd until there is greater certainty over its intentions for its Smorgon Steel Group Ltd investment.

Its BBB-plus long-term issuer default rating was placed on Rating Watch Negative (RWN) on August 18 after BlueScope bought a 19.9 per cent stake in Smorgon Steel at a cost of over $300 million, to block Smorgon's existing merger deal with OneSteel Ltd.

BlueScope is the largest steel company in Australia and New Zealand, and has sizeable operations throughout Asia and in North America.

"BlueScope's intentions for its Smorgon Steel interest are not likely to crystallise until the Australian Competition and Consumer Commission has ruled on the OneSteel/Smorgon Steel merger proposal, which could take several months," Fitch said.

"In the event that the outcome sees BlueScope undertake a significant debt funded acquisition, the rating would most likely be downgraded by one notch to BBB."

Apart from uncertainty surrounding the company's intentions regarding Smorgon Steel, Fitch said additional pressures have recently emerged relating to BlueScope's credit profile.

Fitch also said 2006 was a particularly challenging year for BlueScope with significantly higher costs and lower commodity steel prices during a major growth and expansion phase.

"The agency believes there are several threats that may inhibit the company's ability to significantly improve its credit ratios in the near term," Fitch said.

"Chief among these are a growing challenge from import competition from Asia; the potential for slower than expected ramp up over the next one to two years from BlueScope's new downstream capacity in Asia (as well as the additional costs associated with commissioning these plants); and a likely increase in leverage to finance the Smorgon Steel stake (although this will be partly offset by the introduction of a dividend reinvestment plan, which will be underwritten for the final 2006 dividend)."