One of reasons hybrids have been sold off is that outlook for...

One of reasons hybrids have been sold off is that outlook for cash rate is around 3% for next year. TIMPB has two coupons left at 6.75% fully franked or grossed up at 9.64%. Based on face value at $2.05, this is 20 cents per TIMPB.

So the economics are as follows:
Buy TIMPB at 62 cents say
receive 20 cents plus 4 shares per TIMPB in Sep09; Assuming TIM is 25 cents in Sep09, value is
20 cents coupons plus $1.00 worth of shares = $1.20 (100% return);

Today's 60 cents TIMPB suggests TIM should be 10 cents (non PV basis) so either TIM has further to fall or TIMPB has some way to rise.