sevpc morningstar opinion, page-3

It's now just six months until the step-up date for SEVPC, and just one dividend to go (in May 2010), which will be paid at the healthy rate of 6.92% (grossed up). This will comprise a cash dividend of $2.422 plus $1.038 in franking credits.

SEV will either step up the rate by 2.25%pa and keep SEVPC trading, or will buy them back for $100 a piece. Either way, the numbers look good:

OPTION 1: Step-up. Collect the May div, which would offer a gross yield of 3.7% on today's closing price. Then from June 2010, the dividend rate will be approx. 9.7%pa grossed up.

OPTION 2: Redeem. Collect the May div (as above), then a capital gain of $5.65 (= 6.0%) for a total yield to maturity of 9.7%.

Thoughts, anyone?