Foreign currency convertible bonds (FCCB)
Foreign currency convertible bond is a
special type of bond issued in the currency other than the home currency. In
other words, companies issue foreign currency convertible bonds to raise money
in foreign currency.
FCCB is issued by an Indian company in
These are listed and traded in foreign
stock exchange and similar to the debenture.
It is a convertible debt instrument. It
carries interest coupon. It is unsecured.
It gives its holders the right to
convert for a fixed numbers of shares at a pre- determined price.
It can be converted into equity or
depository receipt after a certain period.
The amount received from
the issue of FCCB should be utilised as per the
guidelines of External Commercial Borrowing (ECB).