Matt,Cheers for your kind words.Yea, I have/do hold GNSPA,...

Matt,

Cheers for your kind words.

Yea, I have/do hold GNSPA, MXUPA, BEPPA and FXJPB. I am a fan. I haven't had *much* profit yet, but, I bought in 'too late' I still expect good profit, circa 25% per year for 2 years was my estimation when I bought in. got out of BEPPA with 35%, got out of MXUPA temporarily with 8%, and fairly flat (but, 95% sure I'm slightly green) on GNSPA/FXJPB. However, conversion is the key :). Watford is certainly knowledagable though... I do disagree with a couple of his tactics (hedging, etc... and, he made the wrong call with a couple of hybrids... [then again, I bought MAK at $2.30, so, I can't talk)).

I missed the $15-$60 boat, unfortunately. Wasn't really onto active investing as I was studying in England January - July.... so had no spare cash [I holidayed a lot :) ], and didn't want to trade the stocks I held for any new stocks. Let alone not having the time to research properly :).

Near-term performance is forecasted to be fine. The forecasts are just, er, traditionally hard to accept. New management though seems to want to over-writedown assets... so, maybe also pessimistic with the profit forecasts for a change? I wouldn't mind waiting to buy ELDPA till the next financial reports... even if I would have to pay $65 instead of $55... Hm.

4.7% above BBSW in 2011 will be massive. There are hybridS on the ASX at 0.75% and 1.05%, and then a bunch betwixt 1.1% and 1.3%. In fact, at 4.7%, the only larger margins will be AQNHA and GNSPA and AAZPB.... but, I VERY much doubt GNSPA will still be listed then. AQNHA is just the exception in the world of hybrids. And, AAZPB has a good chance of redemption before September 2011. Nonetheless, the point remains, 4.7% is very expensive... NOW A DAYS! Let alone historical averages.... and when the credit market loosens up again (it is atm, Westpacs was 3.8%, CBAs was 3.4%, ANZs was 3.1%) in a couple of years, I can envision hybrids at, say, 2% being the norm. At worst, 2.5% for companies, and 2% for banks.... 4.7% would be massive.

The only catch would be if ELD still can't afford ELDPA dividends... but, as has been pointed out, they were willing to pay under extreme financial distress before. ALso, AFAIK, they have to pay out any dividends unpaid in the preceding 12 months upon conversion.
Assume BBSW of 5%avg through Sept 2011, and 5.5% for the next 12 months...
5%+2.2% = 7.2% = $7.20 =$107.2M to convert all the ELDPA.
However, if it was stepped up and converted September 2012 instead.....
5.5%+4.7% = 10.2% = $10.20 = $110.2 to convert all ELDPA..... $3M more expensive...

Current SP is 15c... assuming a doubling in SP to 30c... $3M extra from 30c shares.. What's that, 10,000,000 extra shares issued? Not *VERY* much in the big scheme of things.... but certainly would be nice to avoid, especially if that's the same time as the first dividend payment.

I'm not sure ELD will be taken over, to be honest. I do note it's possibility... but, hmmm... I suppose it's feasible. I flat-out avoid buying shares with that as a hihgly motivating factor though, just personally....

Cheers for your thoughts, but, if you wouldn't mind expanding on just one line...
"I think the future is secured, although near/mid term performance may be questionable."
Why is the future secured? Could near/mid term performance change your position? If ELD made a profit of $30M instead of $60M this FY... would your position change?