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You might want to take a look at Security Analysis -- the book (a Speaker's corner board here) to see a short discussion of the risk/reward situation for convertibles and preferreds.

This link will point to the general area of the discussion:

Note: I haven't researched the GPW preferred to assess its risks, but at the return you quote, there are likely (though not certainly) going to be some risks associated with the preferred that are likely to be greater than what one would find with investment grade bonds. It might be a good idea to assess those risks before committing the capital that could be at risk in such an investment. In an established firm like GPW the risks may not be as great as the yield suggests, but I know I'd want to check their leverage, and debt ratios and credit ratings to assure myself of just what sort of risk I was assuming.

A general discussion of the commonly found risks of preferred stocks appears in the threads that follow:

The subject was Kmart, and included a consideration of their common stock, preferred (convertible) stock, and outstanding bond commitments.
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