DEFINITION of 'Fully Convertible Debenture - FCD'

A type of debt security where the whole value of the debenture is convertible into equity shares at the issuer's notice. The ratio of conversion is decided by the issuer when the debenture is issued. Upon conversion, the investors enjoy the same status as ordinary shareholders of the company.

BREAKING DOWN 'Fully Convertible Debenture - FCD'

The main difference between FCDs and other convertible debentures is that the company can force conversion into equity, whereas in other types of convertible securities, the owner of the debenture may have that option.

FCDs also differ from partially convertible debentures (PCDs). In case of PCDs, part of the instrument is redeemed and part of it is converted into equity,

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RELATED FAQS
  1. How is a debenture stock different from a regular debenture?

    Learn to differentiate between standard debentures and debenture stocks, which are equities that act more like preferred ... Read Answer >>
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    Debentures and bonds can be used to raise capital, but debentures are typically issued to raise short-term capital for upcoming ... Read Answer >>
  3. What are the differences between preference shares and debentures?

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  4. What legal recourse do I have if the counterparty in a debenture agreement does not ...

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