Foreign convertibles are pretty sweet: top down in the sun, and up in the rain.
Likewise, some investors are fans of foreign currency convertible bonds, or FCCBs.
Foreign currency convertible bonds are convertible bonds (we’ll go over that in a sec) that are issued in a foreign currency relative to the issuer. So if you’re an American bond issuer, you could issue a foreign currency bond in any currency that’s not USD (otherwise, it’d just be a bond...a U.S. bond).
Convertible bonds, like convertible cars, let investors switch things up depending on the weather. The default for a convertible bond is to act like a regular bond, with things like coupon and principal payments...but it can be converted into stock.
Putting it altogether: a FFCB is a bond (one that can be converted into stock) that’s issued in a different currency than the issuer’s domestic currency. Get some.
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Finance: What is a Dual Currency Bond?33 Views
Finance allah shmoop what is a dual currency bond Well
a currency duel would be way cooler to bonds One
dusty road in the wild west a saloon a gal
and a gun plan retired or called are paid whatever
they call bonds when they're dead Anyway a duel currency
bond is a bond where the principal and the interest
payments are made in different currencies like here's a bond
whose principal is paid off in u s dollars But
its interest is paid in euros and yeah whatever currency
being used for interest payments is called the base currency
Well why would you the investor of want one of
these things Well dual currency bonds or subject to exchange
rate risk In other words you're making a gamble not
just on an investment but on which way the exchange
rate will bounce That is if you own something it's
highly exposed two euros while then you're kind of making
a bet that the relative to the dollar the euro
zehr gonna appreciate mohr like the government's printing less of
them You have less inflation whatever because then if that
repayment currency appreciates well boom you're more in the money
Than just the interest you collected And if that currency
doesn't appreciate well there's always bank robbery is a last 00:01:21.189 --> [endTime] resort dual currency dueling currencies No
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