A short-term,
convertible bond that, in the event of the
issuer's liquidation, has lower priority with respect to other
debt. That is, a convertible subordinate note is a bond that may be changed into
common stock at the discretion of the
bondholder. If the issuer goes
bankrupt and liquidates, one or more other
debt securities must be repaid before the convertible subordinate note may be repaid. However, as with all debt securities, it has priority over all
stock.