Convertible Loan: U.S. Practice and Applicability in Russia

In the the Russian Mergers & Acquisitions Agency Journal, there was published the article named Convertible Loans: U.S. Practice and Applicablity in Russia co-authored by a Terra Externa's partner, Evgeny Melikhov. The article continues the series of studies on "hybrid" financing mechanisms widely used abroad but less known in Russia commenced by the authors in the mezzanine financing article. This time, the research topic is convertible loan. In the article, key legal and financial aspects of convertibe loan are reviewed through the prism of the U.S. practice where it is actively applied to raise funding both for startups and accomplished businesses and, therefore, developed well enough. Then, the applicability and issues related to using convertible debt in Russia are analyzed against the U.S. practice. The comparative analysis given in the article allows the understanding of the convertible loan mechanism, scope and applicability in the United States and Russia.

The full text of the article (in Russian) is available in the Russian Mergers & Acquisitions journal, 2014, No. 8 (12) and on Terra Externa website, direct link to the English version of the article Vladislav Lurye, Evgeny Melikhov. Convertible Loans: U.S. Practice and Applicability in Russia.

Key words: convertible loan, convertible debt, debt financing, venture financing, bridge financing, convertible note, warrant, commercial papers, promissory note, convertible bonds.