A Foreign Currency Convertible Bond (FCCB) is a type of convertible bond issued in a currency different than the issuer's domestic currency. These bonds are typically issued in foreign currency with a conversion option that allows investors to require their issuer to convert the bonds into their domestic currency at a predetermined rate of exchange. Investors may pay for these bonds with domestic currency, but receive the cash proceeds in an underlying foreign currency.Foreign Currency Convertible Bond (FCCB) are unsecured, fixed-rate debt securities that are not recognized as debt by the Internal Revenue Service (IRS). Instead, they are considered equity by the IRS, and therefore, not subject to capital gains taxes in most instances. The cash flows from these bonds may be reinvested at any time.This foreign currency convertible bond (FCCB) is issued in the currency of another country. The issuer of this foreign currency convertible bond (FCCB) may be a corporation, government, or other entity that issues securities denominated in a currency other than the domestic currency of the issuing entity. Foreign currency convertible bonds are exempt from taxation under the Securities Act of 1933 as they are not considered to be an investment company under Section 3(a)(1)(A) of the Securities Act.
