Quote Originally Posted by Alan3285
they just looked like a great return compared to other risk / return options (like 3% in the bank!)
Do not be dazzled by the deep discount you are buying these things to face.

You would have to agree that the most likely outcome for SCF is to emerge in a significantly deleveraged state from its reorganisation. The accumulated losses in property, losses that can be expected on the related party loans, losses from the reorganisation process and significantly scaled back business opportunities - will leave SCF smaller and weaker.

The SCFHA pref holders will be, along with the equity holders, the ones who "pay the piper".

If you factor in less optimistic scenarios - like a nervous government with a vast exposure through the retail investment guarantee scheme - the prospects for equity and pref holders are much worse.

Let me see ... 3% in a bank vs 50% in SCFHA ... I know how to evaluate the risk side of the equations, my deep fear is the the SCF reward parameters may be completely illusional.