Why do Emerging Market Firms Issue Offshore Dollar Equity Linked Securities?

Rama Seth, Keerat Bhurjee, S. R. Vishwanatha

Research output: Contribution to conferencePaperResearchpeer-review


While depository receipts have attracted much scholarly attention, there is little research on the consequences of issuing foreign currency convertible bonds that account for a large fraction of issuance in global capital markets. We bridge this gap by examining FCCB issuance by Indian firms amounting to $22 billion during 2000-2017. We find that FCCBs could be delayed equity or cheap debt or relax capital constraints. However, issuers experience an increase in default probabilities, a rating downgrade and a deterioration in operating and stock performance. In line with this analysis, stock markets react negatively to the issuance of offshore convertibles.
Original languageEnglish
Publication date2021
Number of pages52
Publication statusPublished - 2021
Event12th Emerging Markets Conference. EMC 2021 - Sofitel Mumbai BKC + Video Conference, Mumbai, India
Duration: 13 Dec 202115 Dec 2021
Conference number: 12


Conference12th Emerging Markets Conference. EMC 2021
LocationSofitel Mumbai BKC + Video Conference
Internet address


  • Financing policy
  • Event studies
  • International financial markets

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