I have re-calculated potential returns on AAZPB. There are 3...

I have re-calculated potential returns on AAZPB. There are 3 options on Sep 2008. One is ALZ exchanges notes for equity, not likely as equity too cheap. The other 2 alternatives are AAZPB steps up and pays an extra 2.5% per annum or it pays out note holders face value. The latter payout at AAZPB=86 gives an equivalent annualised rate of return of 70% per annum. If ALZ elects to step up and we assume AAZPB is paid out in March 2010 when debt markets are quite likely back to normal, the equivalent return is still a very healthy 24% per annum. Given the good chance of a 70% per annum return for two months, AAZPB is the best buy in the hybrids imho.