Translation. Region: Russian Federal
Source: Central Bank of Russia –
The first set of amendments to the rules for issuing convertible bonds was introduced in 2018–2019. However, such securities were issued rarely. Issuers lacked flexibility in setting conversion parameters, and investors were in no hurry to purchase such a complex product, since it requires a more complex analysis of the risk-return ratio. In addition, the situation was negatively affected by macroeconomic uncertainty and the departure of large venture funds from the Russian market.
In order to increase the demand for convertible bonds, the Bank of Russia proposes to create conditions for their use at the pre-IPO stage (thanks to this, the issuer will be able to attract financing on more favorable terms before acquiring public status), and also to consider the possibility of switching from a fixed to a variable conversion rate. Such changes will allow companies to better adapt the instrument to their needs and the market situation.
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