On or around Sep 30, ALZ must (a) pay back $100 principal (b)...

On or around Sep 30, ALZ must (a) pay back $100 principal (b) increase coupon rate by 2.5% or (c) convert to equity at value 102.5

I am told Option (a) is the most likely outcome and buying today at 92 shows return of 8/92 or 35% per annum rate. The next most likely outcome is option (c) being 10.5/92 or 46% per annum. I believe that option (b) will not happen as ALZ will not step up rate as it has bank debt lines much cheaper (rate of return 17% per annum by receiving 2.5% higher interest rate but requires hold till Mar 2010); Cost of funds too high for ALZ to do this.

so AAZPB one of the best hybrids in the market given three months to hold. Others to consider are
TIMPB 68% per annum to Sep 2009
BEPPA 21% per annum to Jul 2012
BNBG 40% per annum to Nov 2010