August 4th, 2008 
Tushar Mathur
A type of convertible bond issued in a currency different than the issuer’s domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock.
These types of bonds are attractive to both investors and issuers. The investors receive the safety of guaranteed payments on the bond and are also able to take advantage of any large price appreciation in the company’s stock. (Bondholders take advantage of this appreciation by means warrants attached to the bonds, which are activated when the price of the stock reaches a certain point.) Due to the equity side of the bond, which adds value, the coupon payments on the bond are lower for the company, thereby reducing its debt-financing costs
The ICAI came out with a detailed description on FCCD in its journal in 2005.
Click below and have a look for details
http://www.icai.org/icairoot/publications/complimentary/cajournal_nov05/703-708.pdf.
More From investinindia
- Will HCL Tech layoff 450 employees?
- Debt funds–Bonds a respite to investors!!
- Ten Indian companies make it to FT Top 500
investinindia Recommends
- Debt Settlement Pros and Cons (The Credit Courier)
- How You Can Stay Out Of Debt (The Credit Courier)
Posted in 
Tags: 
