my understanding is you buy a convertible note for a set price like a share, however instead of dividends like a share, you get an 'interest payment' every quarter. the amount of this payment is set by the equation given in the documents. (bbws + margin) x (1- tax rate) or something similar. the margin in the equation is locked in before purchase. this payment is not guaranteed, and the value could change.
there is no date of maturity on these, you could keep getting payments forever. or nab may offer to buy them back, or you could sell to someone else. these could also become worthless should anything catastrophic happen.
so lets say you buy one note for $100. the equation might work out to a 2.5% return for the year, so you would get $2.50 in payments (split into quarterly amounts), and still own the 1 x $100 note to repeat again the next year.
you could sell the note to someone on the asx for whatever the going price is, or you could wait until NAB offers to pay out the notes at the face value of $100, something may happen making the note worthless, or NAB may even direct that all notes are to be purchased by a separate party.
I could be wrong on the above, thats what i have worked out from reading the documents. happy to be corrected by anyone if i am incorrect.
NAB Price at posting:
$21.84 Sentiment: Hold Disclosure: Held
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