In
finance, a
convertible bond or
convertible note or
convertible debt (or a
convertible debenture if it has a maturity of greater than 10 years) is a type of
bond that the holder can convert into a specified number of shares of
common stock in the issuing
company or cash of equal value. It is a
hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early
speculators such as
Jacob Little and
Daniel Drew to counter
market cornering. Convertible bonds are most often issued by companies with a low credit rating and high growth potential.