RCOM stocks jumps after FCCB refinance

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RCOM stocks jumps after FCCB refinance
The Anil Ambani led Reliance Communication on Monday said that it has tied up for refinancing its Foreign Currency Convertible Bonds (FCCB) with China Development Bank (CDB) and EXIM Bank.

After the statement the company stocks on BSE jumped by 5% at Rs 91.30. At 1.15 pm IST it was seen trading at Rs 89.85 up by 3.93%.

FCCB are type of convertible bond issued in a currency different than the issuer's domestic currency. These are special convertible bonds mix of debt and equity instruments. These bonds are attractive to both investors and issuers.

FCCB also give the bondholder choice to convert the bond into stock.

The loan proceeds would be used for refinancing FCCB worth Rs 6125 crore which are due for redemption on March1, 2012.

Rcom will benefit from extended loan maturity of 7 years and attractive interest cost of about 5%.

This is the largest refinancing in the history of FCCBs by any Indian corporate, the company said in its release.

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