I'm assuming you realise that the interest payment is based on...

I'm assuming you realise that the interest payment is based on the $100 face value of the note?

The notes are selling at around $5 to $6 currently. If B&B make it through, then in May 2009 you'll get $3.13 payment and probably a similar payment in November 2009.

So, in total you'll get over $6 in interest payments during 2009 on a note that you paid $5 or $6 for today. That's around 100% return in the next 12 months.

You will continue to receive interest payments every 6 months until 15/11/2015 when you'll get your $100 face value back or, of course, you can sell them on-market at any time.

At the risk of stating the bleedin' obvious, the big question is whether B&B will make it through.

If you think so, then BNBG will pay you a huge amount of interest in the next 7 years (potentially a 100% return every year) and then return about 15-20 times your purchase price on maturity in 2015.

If B&B are taken over early next year, the price of these notes may return close to their $100 face value very quickly or the $100 maturity may be paid out sooner due to trigger events.

You can see how speculators can make huge amounts from distressed debt IF they are right about the company.

If you think B&B aren't going to pull through, or you have a low pain tolerance, you might want to give this one a miss.

I certainly wouldn't be betting the whole farm on BNBG, but there may be a small speccy play for the (very) brave....