What is meant by foreign currency convertible bonds?

A type of convertible bond issued in a currency different from the issuer’s domestic currency is known as a foreign currency convertible bond (FCCB). A convertible bond is a mix between an equity and debt instrument. Companies issue convertible bonds to lower the coupon rate on debt and to delay dilution. You can read about the Masala Bonds – Benefits, Features & Significance in the given link.

From an Indian perspective, Foreign Currency Convertible Bonds (FCCBs) mean a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which is payable in foreign currency.

Further readings:

  1. Electoral Bonds – Introduction, Context, Importance & Significance
  2. Types of Bonds – Basics of Bond, General Features and Characteristics

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