After May 2010, assuming the rate steps up for SEVPC, the margin...

After May 2010, assuming the rate steps up for SEVPC, the margin will be 4.75%pa over the 180-day BBSW. At current rates, this would represent $9.11pa. And at today's closing price of $93.55, this is a yield of 9.7% gross, or 6.8% fully franked!

Better than the lousy returns that bank deposits offer, plus there's upside potential of 6.7% to reach face value of $100 per security.

My current prediction is that SEV will NOT redeem these securities, but will step up the rate and keep them trading.