Broken Hill's claim to fame, oil and mining giant BHP, is worth around $145 billion. But the company has been facing backlash from shareholders who want it to move towards cleaner forms of energy, 'cos fossil fuels are bad for the environment. 

There was some speculation BHP would sell its $20 billion oil and gas portfolio. But instead, it's going to merge with Perth-based oil and gas company Woodside Petroleum in a deal worth a UGE $41 billion.

The S&P - aka the Standard & Poor's (the folks that create financial market benchmarks like the S&P/ASX 200) reckons this would reduce BHP's diversification, which means its credit rating could go from A down to a BBB+ - the lowest is ever been.

So what's the key learning?

The S&P credit ratings are their forward-looking opinions about a company’s credit-worthiness. In other words, it's the S&P's opinion on whether a company can meet its financial commitments.

S&P read company reports, news articles and learn about the company's management to determine what its credit rating will be. Then, investors look at that score (among other factors) when they're deciding whether or not to invest in the company. 

The highest rating the S&P can give is an AAA rating - and the lowest is a D. By selling its oil portfolio, BHP is increasing its a dependency on a single asset, which makes it more vulnerable - and warrants two notches off their belt to a BBB+.

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