Foreign Currency Convertible Bond

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Foreign Currency Convertible Bond

A convertible bond that is issued in a currency other than the issuer's own. A company may issue an FCCB if it intends to make a large investment in a country using that foreign currency. For example, when an American company issues a convertible bond in euros because it intends to build a factory in Germany, this is a foreign currency convertible bond. Like all convertible bonds, an FSSB is a bond that a bondholder may exchange, at a certain price, for common stock in the company issuing the bond. The number of shares one receives for each bond and the price one pays for those shares are determined when the convertible bond is issued. This allows bondholders to take advantage of both the low risk of a bond and the potential price appreciation of the underlying stock. The FCCB also reduces the foreign exchange risk for the issuer.
References in periodicals archive ?
Kirti Vagadia, Chief Financial Officer - Suzlon Group said: "I am very pleased to inform that our bondholders have approved our request for up to a 45 day extension of maturity on our June tranche of FCCBs.
Yields on their FCCBs have jumped beyond 50 percent as investors have sold off the debt.
Accordingly, in addition to its internal accruals the Company raised a QIP of US$ 85 million and met its obligation of FCCB repayment.
Note: Suzlon had issued a 5 year FCCB series in April 2011 for US$ 175mn; having a 5% coupon and April 2016 as maturity date (5% April 2016 FCCB series).
Schadler was appointed to the boards of directors of Citizens and FCCB.
The FCCB is the longest tenor convertible issuance out of India and the proceeds are to be mainly utilized to refund "certain outstanding obligations of GMR and its subsidiaries".
The upcoming FCCB maturity was one of the major overhangs on the company for the past few months and with today's announcement they have at least managed to address some concerns," SMC Global's Thunuguntla said.
New Delhi, July 8 (ANI/Business Wire India): Prakash Industries Ltd (PIL), a business house with interests in steel and power, is in the process to raise around 100 million dollars through an FCCB issue.
Borrowings at SIIL consolidated level as at 31 March 2010 were Rs 9,260 crore, comprising of borrowings at Sterlite copper, including FCCB, at Rs 5,322 crore, Rs 2,012 crore at BALCO and Rs 1,866 crore at Sterlite Energy.
OTC Pink: CZFS) and First National Bank of Fredericksburg (FNB) said FNB stockholders have approved the pending merger of FNB with and into FCCB.
The investor fund, however, has offered Wockhardt a new revamp programme, under which the promoters will issue fresh foreign currency convertible bonds (FCCBs) to cover the current outstanding of $140 mn, from a previous FCCB of 2004.
The proceeds of this FCCB offering are intended to be used for financing the growth plans of REI Agro, including an increase in the company's processing capacity.