News: NAB National Australia Bank Announces Capital Notes 3 Offer, page-21

 Yep, same as PERLS XI, sorry I meant to say gross yield. All the Big Four ordinaries are paying higher yields than the long term average at the moment and NAB is the highest so the difference with these is much higher. For the CBA hybrids it's about 5.8% vs 8.3% gross for the ords which is 70% of the ords div.

I have the same reservations around conversion risk but I figure that the most likely scenario is that the Big Four will take stress but their viability won't be threatened enough for a loss event. In this case, hybrids should actually significantly outperform ordinaries - the ords could lose 30% and slash dividends, but the hybrids shouldn't move too much and they still need to pay a div unless they completely stop the ordinaries div.

On the other hand if the economy recovers then interest rates will rise which also means the hybrid divs will rise.

All in all I'm happy to hold a small portion of my portfolio in hybrids, about 5%. If it does hit the fan bad enough that the Big Four need to start converting their hybrids, writing off 5% of my portfolio on a loss event is going to be the least of my worries.