87.50
$6.9 dividend
=7.9% yield.
For reasonable low risk.
With the potential for
12.5/87.5 = 14.2% capital gain.
There has been commentary that these will be redeemed (for $100). The reasoning behind this is that they are a relatively expensive form of debt.
So, the idea would be to redeem these, then take out a loan and pay, say, 6% interest.
Interest rate premiums have been a bit strange since 2007.... but, when they return to normal, a 3.9% margin above BBSW is likely to be very excessive.
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