i too would be interested to hear some more opinions on this offer.

From my brief analysis:

Return side:
- Initial rate looks ok at 8% vs 5-5.5% on offer with the banks over a 5 year term
- margin at 4.5% to bbsw with step ups of .25% each reset is good - makes it pretty likely the bonds will be redeemed 2017 imho

Risk side:
- Clearly Contact is pretty stable and low risk although could this change with privatisation of electricity sector
- Would prefer a more senior bond but hey - they know the can get it away so why not

Overall a pretty fair return - probably worth a small allocation for most retired investors. Maybe 20k on a mill portfolio.