What are your prediction for SEVPC come May 2010? Will SEV step...

What are your prediction for SEVPC come May 2010? Will SEV step up the rate to a massive 4.75% margin, or return the cash and create TELYS4 with a smaller margin?

Considering the big banks are offering decent margins for their hybrids (CBA at 3.4% and WBC at 3.8%), I think it's hard to imagine SEV getting away with anything much smaller than 4.75% even if it were to create a new issue.

At $94, SEVPC is offering a 6% running yield until May 2010. Assuming the rate steps up on that date, the distributions will then be as high as $7.89pa, which works out to 8.4%pa (gross) using $94 as the denominator.

Let's not forget SEV is sitting on over a billion bucks in cash - are there any other hybrids that can compete with these sorts of figures?

Would be very interested to hear all your thoughts.