FCEBs: A new way to borrow overseas

By Shardul Thacker,Mulla & Mulla & Craigie Blunt & Caroe

Indian corporations can raise foreign currency debt either by commercial loans from non-resident lenders through the external commercial borrowings (ECBs) route, or by issuing foreign currency convertible bonds (FCCBs), convertible into equity shares of the issuing company, for subscription by non-residents.

With a view to providing corporations with an additional window for overseas borrowing, the Reserve Bank of India (RBI) has put into operation a scheme for the issuance of foreign currency exchangeable bonds (FCEBs).

Issuing and subscribing

FCEBs are bonds expressed in foreign currency, the principal and interest in respect of which are also payable in foreign currency.

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Shardul Thacker is a partner with Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.


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