I think we agree same thing except shorting TIM without buying...

I think we agree same thing except shorting TIM without buying TIMPB is pure speculation. By purchasing TIMPB, you have return greater than 60% per annum to Sep09 and this is very attractive.

By shorting TIM as well, you hedge the risk in buying TIMPB. When TIMPB matures, noteholders will be given a slab of TIM shares which they will sell on the market. So the future for TIM is not good. But owning TIMPB, you get $2.05 worth of shares no matter how low the price of TIM goes. If TIM goes below 51 cents, you get maximum conversion of 4 TIM to each TIMPB. This will eat slightly into your return but that will be more than compensated by the short on TIM. The only problem is if TIM goes out of business. Then the short will not be enough to cover your total loss on TIMPB. I have hedged 75% of TIMPB in TIM CFD's.

The actual return on TIMPB is far too good to ignore. If you think TIM survives and I think it will, TIMPB is the way to go.

Based on price of 1.35 for TIMPB and grossed up coupon of 8.85%, I calculate TIMPB now offers an equivalent return of 68% per annum to Sep09. The bulk of this is a capital gain (46%) which has favourable tax treatment.