Reserve Bank of India encourages convertibles buyback, maturity extension

By Devika Patel

Knoxville, Tenn., Nov. 17 - Reserve Bank of India announced that, due to uncertain and unsettled global financial conditions, Indian foreign currency convertible bonds are trading at a discount, and the bank believes it would be beneficial for the companies concerned, as well as for the economy, if the issuers were to buy back the bonds at the prevailing discounted rates.

The bank said it will consider proposals from Indian companies to buy back their convertibles prematurely.

The buyback should be financed by the company's foreign currency resources held in India or abroad and/or out of fresh external commercial borrowing raised in conformity with the current norms.

Extending the bonds' maturity dates will also be permitted, the banks said, at the current all-in cost for the relative maturity.

Based in Mumbai, India, Reserve Bank of India helps ensure the country's monetary stability.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.