And again leading from your post 1031 wouldn't the simplest model be to roll your money into the SCF020's. Why put it into 8% or 8.25% for a year when you can do so much better with the 020's?. I guess the answer to that might be that your Investment Advisor would miss a slice of the action if you went for the 020's under your own steam in preference to the 8% debentures
Certainly there is money to be potentially made out of SCF. But the 8.25% begs the question "what are the SCF lending rates". I presume it will have to be at the very least 9.75% plus broker margin. Thats 8.25% to investors and 1.5% into the Govt Guarantee scheme. So borrowers are paying over the odds for their loans - personal borrowers are paying 14.5% for home renovations when the friendly local bank will do it for around 6%. So who would pay over the odds - distressed borrowers who can't get a better deal else where. The borrowers risk profiles have to flow into SCF books - which will increase SCF's likelihood of a default event. If SCF can get past 31 Dec 2011 what will depositors do when there is no guarantee and the loan book is full of distressed borrowers? Investors could perhaps do better than by-passing the SCF middle man and lending directly to those who borrow from SCF - that way they would be propping up real business rather than a finance company who can't stand on its own two feet.