Key Takeaways. A compulsory convertible debenture
Can CCD be repaid?
is a bond that must be converted into stock at its maturity date. For companies, it allows for repayment of debt without spending cash. For investors, it offers a return in interest and, later, ownership of shares in the company.
Can CCD be redeemed?
[2] Further a company issuing compulsory convertible debentures, need not execute debenture trust deed or appoint a debenture trustee as it is not securing anything and no payment is to be made at the time of maturity of the CCD converts into equity and not redeemed.
Can CCDs be bought back?
Buyback of securities is another alternative, however, CCDs cannot be bought back. CCDs must be converted into the underlying equity shares to be bought back. Buy-back of securities is subjected to certain conditionalities as stipulated under Section 77- A of the Companies Act, 1956.
Is CCD a loan?
The TPO and DRP erred in treating CCDs as ECBs and benchmarked the interest rate against LIBOR rate. The CCDs is a hybrid instrument and cannot be per se treated as ECB / loan.
Are convertible debentures a good investment?
A convertible debenture will usually return a lower interest rate since the debt holder has the option to convert the loan to stock, which is to the investors' benefit. Investors are thus willing to accept a lower rate of interest in exchange for the embedded option to convert into common shares.
What is OCD and CCD?
Broadly, the popular debenture instruments used by FPIs are of three kinds: Non-convertible debentures (NCD), Compulsorily Convertible Debentures (CCDs), and Optionally Convertible Debentures (OCD). NCDs are pure debt instruments.
What is OCD finance?
Definition: Optionally convertible debentures are debt securities which allow an issuer to raise capital and in return the issuer pays interest to the investor till the maturity.
Is OCD debt or equity?
c) Since, the OCDs proposed to be issued is a debt instrument with an Option to convert into equity, GIL proposes to issue the OCDs in terms of provisions of Sections 42 and 62(3) of the Companies Act, 2013.
What is a cap on a convertible note?
A. A convertible note cap sets a maximum valuation at which the investment made via the convertible note can convert into equity. Investors in the convertible note typically get converted at the lesser of the valuation of the next qualified priced round and the cap.
What happens when a convertible note matures?
Most convertible notes, like other forms of debt, provide that they are due at the maturity date, usually 18 to 24 months. Occasionally, convertible notes will provide that at maturity they automatically convert to equity, or convert to equity at the option of the lender.
What is the opposite of OCD?
However, the clinical definitions of these disorders are different. People with OCD have obsessive, intrusive, repetitive thoughts, known as obsessions. They may feel compelled to repeat behaviors, which are known as compulsions. With OCPD, a person may be excessively focused on order and perfection.
Are dogs good for OCD?
How Can Service Dogs Help with OCD? When someone is suffering from OCD, they will have many intrusive thoughts. A service animal will help combat this issue by tactile or deep pressure stimulation. Repetitive and compulsive behaviors are also helped by service dogs physically interrupting the compulsive behavior.
Why do I have OCD?
Experts aren’t sure of the exact cause of OCD. Genetics, brain abnormalities, and the environment are thought to play a role. It often starts in the teens or early adulthood. But, it can also start in childhood.
Is anxiety a mental illness?
Anxiety disorders are the most common of mental disorders and affect nearly 30% of adults at some point in their lives. But anxiety disorders are treatable and a number of effective treatments are available. Treatment helps most people lead normal productive lives.
Is OCD a disorder or disease?
Overview. Obsessive-Compulsive Disorder (OCD) is a common, chronic, and long-lasting disorder in which a person has uncontrollable, reoccurring thoughts (obsessions) and/or behaviors (compulsions) that he or she feels the urge to repeat over and over.
What is CCD in start up?
CCD or Compulsory Convertible Debenture is a familiar term for most promoters and investors in the start-up ecosystem as it basically means an instrument issued by a portfolio company in the form of debt against an investment and is convertible into equity shares of such company at a specified time (no later than 10 …
How does valuation cap work in SAFE?
A valuation cap is a ceiling imposed on the price at which a SAFE will convert to stock ownership in the future. It is the maximum valuation at which an investor can convert a SAFE into equity: a pre-negotiated amount that serves to “cap” the conversion price once shares are issued.
How do you value a SAFE note?
Key Elements in a SAFE Note
For example, if the company offered SAFE note holders a 20% discount and achieves a valuation of $10 million, with shares available to new investors at $10, the SAFE investors will be able to buy their shares at $8, thus receiving a 20% discount.
How long do convertible notes last?
Most convertible notes, like other forms of debt, provide that they are due at the maturity date, usually 18 to 24 months. Occasionally, convertible notes will provide that at maturity they automatically convert to equity, or convert to equity at the option of the lender.
Can you repay convertible debt?
Do You Have to Pay Back a Convertible Note? Convertible notes are just like any other form of debt – you’ll need to pay back the principal plus interest. In an ideal world, a startup would never pay back a convertible note in cash.
What causes OCD?
What causes OCD? Experts aren’t sure of the exact cause of OCD. Genetics, brain abnormalities, and the environment are thought to play a role. It often starts in the teens or early adulthood.