I considered SEVPC... but, with interest rates rising... and Seven having cash... Seven is quite susceptible to calling in their bonds in May 2010...
Besides, at a step-up rate of 4.75... if BBSW is 4.5%, this is only 9.25% per annum. Good, yes.... but, lower than holding FXJPB till 2011, then finding a new bond / buying Seven then / etc.
So, on $2000 max..... you are looking at 20 SEVPC @95.90.... and, about $80 capital gain.
+ a bit of interest... (about $6.42 before franking).... = $128.57
So, $1918 turns into $2,208. Less brokerage (assume, one way), = $2,178.57.
Don't get me wrong; this is a nice return...I just think the risk/reward profile of FXJ, GNS is better.
FXJ Price at posting:
$1.65 Sentiment: None Disclosure: Held
