Indian corporates struggle with FCCB redemptions

Many Indian issuers of foreign currency convertible bonds maturing this year face defaulting on the debt after depressed equity prices force the companies to redeem rather than convert the bonds to equity


A fifth of foreign currency convertible bonds (FCCBs) issued by Indian companies and which are in line for redemption in 2012 are likely to default, according to a report by credit rating agency Fitch Ratings published on February 22.

Fitch says a total of 59 Indian companies face redemption of $7 billion in FCCBs during 2012. About 63% of the amount due is likely to be repaid from a combination of internal accruals and fresh borrowings, while 17% is expected to undergo restructuring (mostly time

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