S&P: Inco, Falconbridge on positive watch

Standard & Poor's said it revised the CreditWatch implications on Inco Ltd. and Falconbridge Ltd. to positive from developing, reflecting the increased likelihood that the ratings will be raised after the two companies announced a friendly three-way merger with Phelps Dodge Corp. (BBB/stable/A-2).

S&P added that should the three-way transaction be completed as announced, the BBB- ratings on Inco and Falconbridge will be equalized at BBB with a positive outlook along with the ratings on their parent, Phelps Dodge.

The ratings remain on CreditWatch because of the protracted uncertainty around the various takeover scenarios, including the unknown responses of Teck Cominco Ltd. (BBB/Watch negative) and Xstrata plc, S&P noted.

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